Daily ETF Watch: New EM Real Estate Fund

September 29, 2014

New fund is first to focus exclusively on real estate securities in emerging markets.

On Monday morning, Guggenheim Investments rolled out a first-to-market emerging markets real estate ETF. With income, alternative exposures and emerging markets on investor minds, the fund seems like it may be a triple threat.

The Guggenheim Emerging Markets Real Estate ETF (EMRE) tracks an index from AlphaShares, the China-focused investment management company that boasts Burton Malkiel as its chief investment officer. The benchmark covers companies and real estate investment trusts that primarily develop, manage or own properties in markets that S&P Dow Jones Indices has classified as having emerging status, a press release said.

A fact sheet from Guggenheim indicates that at launch, the fund had 118 holdings from 18 different markets. China has the largest presence in the index, with a 19.05 percent weighting. The fact sheet also highlights the growth of emerging markets’ presence in real estate securities from roughly 2 percent of the market in 2000 to 11 percent in mid-2014.

EMRE comes with a total expense ratio of 0.65 percent.

The Vanguard Global ex-U.S. Real Estate ETF (VNQI | B-78) is the biggest fund in the international real estate space, with more than $2.1 billion in assets under management, and it probably has the largest weighting to emerging markets of all its competitors, at 13.68 percent.

While that’s fairly proportional exposure to the real-world emerging market real estate securities space, EMRE provides investors with pure, targeted exposure, albeit at a higher price. VNQI’s expense ratio is just 0.27 percent, almost 40 basis points lower.

4 PIMCO Fund Closures

Friday was the last trading day for four of PIMCO’s fixed-income exchange-traded funds. Although the funds had all been trading for a few years, they had failed to accumulate assets.

The ETFs and their assets at the time their closures were announced in mid-August are as follows:

BABZ was rolled out in September 2010, while the other ETFs launched in November 2011. The funds will be liquidated on or around Oct. 1. A little more than 60 ETF and ETN closures have been announced year-to-date.


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