VelocityShares offers up three highly liquid riffs on the emerging markets focused on depositary receipts.
VelocityShares, the money management firm known so far for its family of ETNs, today launched a trio of equities funds focused on different pieces of the emerging markets universe.
The company has around $956 million in assets in its family of ETNs, 30 percent of which is tied to commodities strategies, but announced its intention to enter the world of ETFs last fall. The firm has found an entry point via ALPS, the Denver-based fund distribution firm that also sponsors a number of ETFs, including the $4 billion Alerian MLP ETF (NYSEArca: AMLP).
The emerging markets strategies, each of which will focus on relatively liquid global depositary receipts listed in London, are:
- VelocityShares Emerging Markets Depositary Receipt ETF (NasdaqGM: EMDR)
- VelocityShares Russia Select Depositary Receipt ETF (NasgaqGM: RUDR)
- VelocityShares Emerging Asia Depositary Receipt ETF (NasdaqGM: ASDR)
The emerging markets—and Russian and Asia in particular—have become increasingly popular in recent years as investment destinations that can serve up outsized returns, but access to some of those far-flung markets, and concern about the dependability of market structures, underpin the argument for depositary receipts.
“As investors look to further diversify their portfolios, there is increased interest in emerging market equities, and American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) enable investors to access emerging market equities with the comfort of developed-market securities regulation,” Nick Cherney, chief investment officer and co-founder of VelocityShares, said in a press release.
“Depositary receipts are issued by a bank that purchases shares of a non-U.S. company and issues shares based on the foreign holdings,” the company said in the release.
ADRs are depositary receipts that trade on a U.S. exchange and thus are subject to registration and disclosure requirements under the Securities Act of 1933 and Securities Exchange Act of 1934.
The funds each cost 0.65 percent in expense ratio.