In a timely move, Emerging Global Advisors has launched an emerging markets ETF that excludes China and Hong Kong from its investment universe. The EGShares EM Core ex-China ETF (XCEM) tracks an in-house cap-weighted index that includes everything from small- to large-cap stocks.
Beyond China and Hong Kong, Emerging Global currently classifies the following countries as emerging markets: Brazil, Chile, Colombia, Czech Republic, India, Indonesia, Kuwait, Malaysia, Mauritius, Mexico, Pakistan, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan and Turkey. XCEM’s underlying index can cover up to 700 companies with market capitalizations of at least $100 million from those select countries.
The fund’s prospectus noted that the index covered a market capitalization range of $100 million to $140 billion as of the end of June.
The fund’s launch seems particularly timely given the late-August meltdown of China’s markets, which no doubt has investors nervous. There are already at least two funds that cover the broad emerging market space that exclude BRIC countries—the nearly $200 million EGShares Beyond BRICs ETF (BBRC | D-37) and the $2.5 million SPDR MSCI EM Beyond BRIC ETF (EMBB | F-62)—but none that solely excludes China and Hong Kong.
XCEM trades on the NYSE Arca and comes with an expense ratio of 0.35 percent.
iShares Muni Fund Closes
iShares closed down one of its target-date-maturity ETFs . Sept. 1 was the last day of trading for the iShares iBonds Sep 2015 AMT-Free Muni Bond ETF (IBMD), which had reached its maturity.
The fund had covered investment-grade municipal bonds maturing between May 31 and Sept. 2, 2015, according to its documentation. iShares has another five funds in the family, maturing on Sept. 1 of each year from 2016 to 2020.
Distributions are scheduled to be made to investors on or after Sept. 8.
SPDR Share Splits
State Street Global Advisors announced Sept. 1 that it would implement share splits on 10 of its ETFs. Nine funds will undergo two-to-one splits, while the tenth fund, the SPDR S&P Biotech ETF (XBI | A-75), will undergo a three-to-one split.
The nine funds experiencing two-for-one share splits include the following:
- SPDR S&P Aerospace & Defense ETF (XAR | A-75)
- SPDR S&P Health Care Equipment ETF (XHE| B-62)
- SPDR S&P Health Care Services ETF (XHS | A-56)
- SPDR S&P Pharmaceuticals ETF (XPH | A-53)
- SPDR S&P Retail ETF (XRT | A-54)
- SPDR S&P Semiconductor ETF (XSD | A-66)
- SPDR S&P Software & Services ETF (XSW | B-19)
- SPDR S&P Transportation ETF (XTN | A-74)
- SPDR Morgan Stanley Technology ETF (MTK | A-79)
The record date for the splits is set for Sept. 8, with the pay date scheduled for Sept. 10. While it does not affect a fund’s total market capitalization, a share split multiplies the number of shares, lowering their individual prices.
In fact, SSgA noted in a press release, “These share splits will make the 10 SPDR ETFs more affordable for investors through lower trading costs and provide greater efficiency in the creation and redemption process, which leads to the potential for increased liquidity.”
Contact Heather Bell at [email protected].