Daily ETF Watch: Ex-China EM Fund Planned

Emerging Global Advisors files for an emerging market fund that excludes China.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

While firms like Vanguard are upping the exposure to China in their international funds by adding in A-shares, Emerging Global Advisors is bucking the trend by filing for an ETF that covers emerging markets except China.

 

The EGShares EM Core ex-China ETF (ECXC) will track a cap-weighted underlying index covering 100 to 300 companies with market capitalizations above $100 million. Eligible components must be listed in developing markets, but not in China or Hong Kong.

 

Currently, there are no broad emerging market ETFs that exclude China. An ex-China product means investors who either want to avoid exposure to the country entirely or take a more granular approach to their China allocation could still get exposure to the emerging market space in one fell swoop.

 

No emerging market has as many ETFs that make it their exclusive focus as does China. Currently, 35 funds target the China market and subsets thereof—and that’s not even including funds focused on Hong Kong. Investors may not have many choices when it comes to a country like Mexico (covered by five ETFs), but they can create a finely tuned portfolio for their China exposure.

 

The filing did not include an expense ratio.

 

 

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.