ETF Watch: GaveKal Shutters EM Fund

Friday, Feb. 10, was the last day of trading for the GaveKal Knowledged Leaders Emerging Markets ETF (KLEM). The fund rolled out in July 2015, but never really gathered assets, unlike its counterpart, the GaveKal Knowledge Leaders Developed World ETF (KLDW), which has nearly $58 million in assets under management.

Both funds sought to capture what GaveKal Capital calls the “knowledge effect,” which posits that innovative companies are more likely to outperform the market. However, while KLDW has been on a mostly upward trajectory since its launch and has kept pace with comparable plain-vanilla ETFs, KLEM’s trendline is far more jagged, recording a negative return between its launch and the end of January 2017. KLEM has also consistently underperformed plain-vanilla broad emerging market funds.

KLEM is the fourth ETF to close since the start of 2017, down from seven closures by this date last year.

Contact Heather Bell at [email protected].