Emerging Global Adds 11 ETFs To Plans

December 06, 2011



Emerging Global Advisors, the New York-based ETF firm focused only on emerging markets, filed papers with U.S. regulators to market 11 ETFs linked to a roster of benchmarks that divide up the developing markets in a variety of ways, ranging from countries to regions to sectors and volatility-focused income plays.

The comprehensive filing introduces new focus areas for the company, with ETFs dedicated to Turkey and South Africa. But it also expands on strategies that have resonated with investors.

Emerging markets remain attractive to investors as growth plays with a veneer of value created by this year’s global sell-off. U.S. investors look to the developing world for income amid a sluggish global economy that has impaired the prospects for developed markets for the last three years.

EGShares now ranks as the 25th-largest ETF provider in the United States, with total assets under management of more than $500 million, according to data compiled by IndexUniverse.

Among the ETFs planned, two are dividend focused with an eye for keeping volatility in check, essentially country-specific versions of the EGShares Low Volatility Emerging Markets Dividend ETF (NYSEArca: HILO) the company rolled out this year.

HILO is designed to provide higher income and lower beta than the MSCI Emerging Markets Index. It came to market in August and has gathered nearly $20 million.

The Dividend ETFs joining HILO, and their price tags, include:

  • EGShares Low Volatility China Dividend ETF, 0.85 percent
  • EGShares Low Volatility Brazil Dividend ETF, 0.85 percent

The volatility-focused dividend ETFs each track a dividend-yield weighted Indxx benchmark comprising 30 securities deemed to have lower relative volatility than their respective 50-securities free-float capitalization-weighted Indxx benchmarks.

Companies need to have a market capitalization of at least $250 million and be domiciled in China and Brazil, respectively.

Expanding Country Reach

Some of the new ETFs planned are country-specific ETFs, two of which screen for small-cap companies thought to be more directly linked to domestic themes. A third adds to EGShares’ growing roster of India-focused sector plays.

The funds and their respective fees are:

  • EGShares Turkey Small Cap ETF, 0.85 percent
  • EGShares South Africa Small Cap ETF, 0.85 percent
  • EGShares India Consumer Goods ETF, 0.89 percent


Both the Turkey ETF and the South Africa ETF will track a respective free-float capitalization-weighted Indxx index, each consisting of 30 companies domiciled in that given country that have market capitalizations between $100 million and $2 billion.

The India ETF will invest in ADRs and GDRs as well as local shares of Indian consumer goods companies with a market capitalization of at least $100 million. It will replicate the Indxx India Consumer Goods Index, a free-float capitalization-weighted index comprising the sector’s top 30 companies.

It would join EGShares’ other India ETFs: the EGShares India Consumer ETF (NYSEArca: INCO) launched in August, and the India Infrastructure ETF (NYSEArca: INXX).


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