Source Launches Two Active ETFs

October 07, 2014

Exchange traded fund provider Source has teamed up with active investment manager Ashmore to launch two actively managed ETFs, adding to its existing product offering.

The Ashmore Source UCITS ETFs invest in emerging markets and are offered in a new share class of the Ashmore SICAV.

The Ashmore SICAV Emerging Markets Total Return Fund ETF has a total expense ratio of 1.10 percent and provides an active approach to allocating between emerging market corporate bonds, sovereign local currency and U.S. dollar denominated debt. It aims to take advantage of opportunities that arise throughout the market cycle.

The Ashmore SICAV Emerging Markets Corporate Debt Fund ETF has a TER of 1.15 percent and provides more focused exposure to the corporate bond sector, where spreads over the developed market corporates are at attractive levels.

The ETFs are listed on the London Stock Exchange and are available in USD. They are invested physically in a diversified portfolio of bonds and are managed actively. They add to Source’s existing active ETF offering.

Michael John Lytle, chief development officer at Source, said: ”Investors wanting to diversify and pick up additional yield are looking beyond developed markets. Ashmore is one of the very few managers solely dedicated to Emerging Markets and with a very long and successful track record. Investors will now be able to access their expertise in active management while benefiting from the intra- day trading, liquidity and increased transparency of Source’s ETF structure.”

Christoph Hofmann, global head of distribution at Ashmore, added: “Despite their huge potential, strong growth prospects and favourable fundamentals, Emerging Markets remain significantly under-represented in most investors’ global asset allocation. As an active manager with over 20 years’ experience in Emerging Markets, a key objective is to make the wealth of Emerging Market opportunities more readily available. We are therefore delighted to partner with Source to provide investors with an additional easy and efficient way to access our existing mutual fund strategies through an actively managed ETF share class.”

Earlier this year Source gave up a majority stake in its business to global private equity firm, Warburg Pincus, as it looked to become a top tier ETF provider.

The ETF provider has subsequently increased its presence in the market, launching a number of new products, including Europe’s first Nikkei ETF earlier this month, breaking into the U.S, increasing its footprint in other European markets, most recently listing 26 ETFs on the Borsa Italiana, and building out its teams across the globe.





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