SSgA to slice and dice emerging markets into regional small-cap ETFs
State Street Global Advisors plans to market four emerging markets ETFs that are both small-cap versions of broad emerging market funds the company already offers, as well as subsets of its three-year-old SPDR S&P Emerging Markets Small Cap ETF (NYSEArca: EWX).
SSgA is already behind a roster of emerging markets funds that include the SPDR S&P Emerging Asia Pacific (NYSEArca: GMF), a Europe fund, (NYSEArca: GUR) and a Latin America ETF, (NYSEArca: GML).
The company’s broader small-cap emerging markets strategy fund, EWX, tracks the under-$2 billion universe of emerging market securities through the S&P BMI Global Equity Index. EWX has gathered nearly $615 million in assets and costs 0.65 percent.
The new regional lineup would meet growing competition in the growing world of emerging market investments. Small-cap funds are being touted as a way for investors to gain access to domestic economies. The new ETFs will compete with funds such as Van Eck’s $27 million Market Vectors Latin America Small-Cap ETF (NYSEArca: LATM), as well as country-specific funds from sponsors such as IndexIQ and iShares.
The lineup, detailed in paperwork SSgA filed with U.S. regulators, includes:
- SPDR S&P Small Cap Emerging Asia Pacific ETF
- SPDR S&P Small Cap Emerging Europe ETF
- SPDR S&P Small Cap Emerging Latin America ETF
- SPDR S&P Small Cap Emerging Middle East & Africa ETF
Each fund will use sampling strategies to track their respective regional S&P float-adjusted market-capitalization-weighted indexes. Each of those benchmarks is a subset of the S&P BMI Global Equity Index, a comprehensive float-adjusted, market- cap-weighted rules-based benchmark.
The regional small-cap indexes focus on publicly listed companies with total market values ranging from $100 million to $2 billion. Each individual stock is capped at 25 percent of the basket, and the top five securities can’t represent more than 50 percent of the mix.
The company didn’t specify fees or tickers of the planned funds.