Daily ETF Watch: DB Targets LatAm Region

Deutsche Bank files for ETF covering Latin America Pacific Alliance countries.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Deutsche Bank, mining new corners of the ETF market, is planning to launch an ETF that covers the countries in Latin America’s “Pacific Alliance”: Chile, Colombia, Mexico and Peru. Costa Rica is slated to become a member of the trade bloc soon. The group of countries formed the alliance in 2011.

 

The setup is somewhat like that of the European Union, in that the member countries ae seeking to integrate their economies and allow for free trade and travel among the members. The alliance is also seeking to expand trading activities with the Asia-Pacific region.

 

The Deutsche X-trackers MSCI [Latin America Pacific Alliance] ETF will list on the NYSE Arca and track an index that offers market-cap-weighted exposure to the four countries in the alliance. Caps will ensure that a single company or country does not dominate the index.

 

The fund is something of a shift for Deutsche Bank because it’s not currency hedged and covers a Latin American region. However, it is somewhat similar to a fund offered by Global X. The Global X FTSE Andean 40 ETF (AND | F-37) covers Colombia, Peru and Chile—but not Mexico. It has gathered only $6 million in assets since its 2011 inception. The inclusion of Mexico may add to Deutsche Bank’s allure.

 

 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.