Daily ETF Watch: 2 More ETFs Bite The Dust

Emerging Global Advisors, the investment advisor behind EGShares ETFs, is planning to close two of its funds next month.

The decision, according to the company, is centered on the fact that these funds haven’t gotten much traction, and shuttering them will allow the firm to “streamline” their offering.

• The EGShares Blue Chip ETF (BCHP | D-49), which came to market about 18 months ago, has only $4.4 million in assets. The fund tracks an equally weighted index of developed-market companies that get significant and growing revenues from emerging and frontier markets.
• The EGShares Brazil Infrastructure ETF (BRXX | F-23) came to market in 2010, and has only gathered $8.7 million in assets. There’s no question that marketing emerging market ETFs in recent months hasn’t been easy. The region has delivered consistent underperformance, and many investors have been shunning the segment altogether. Brazil has been hit particularly hard, as political uncertainty, a slump in commodities markets and concerns about China cloud the country’s outlook.

Together, both funds represent less than 2 percent of Emerging Global’s ETF assets.

Investors may sell their positions in these ETFs on or before Oct. 30. Those who don’t will receive cash equal to the amount of the net asset value of their shares, the company said in a press release. Trading will stop in the funds before market open on Nov. 2.

Van Eck Plans New China ETF

Van Eck has filed paperwork detailing a new China-focused ETF, the Markets Vectors Private-Owned Enterprises ETF.

The fund is designed to replicate the CSI Private-Owned Enterprises 200 Index, and will invest in mainland-listed 200 largest and most representative private-owned companies, as determined by the index provider, according to the prospectus.

“A company is considered a private-owned enterprise if it is ultimately controlled by a domestic Chinese natural person (including Hong Kong, Macao and Taiwan residents),” the company said in the filing.

While the index will look for the largest firms, the universe may include midcap names. As of April 30, the index included companies with market caps ranging from $1.4 billion to $46.4 billion, the filing said.

No fees or ticker were disclosed.

Contact Cinthia Murphy at [email protected].