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A First: Emerging Markets ETFs

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Emerging Global Advisors LLC has launched the first emerging markets sector ETFs, the company announced May 21. Listed on the NYSE Arca electronic exchange, the two new funds–the EGS Emerging Markets Energy Fund (EEO) and the EGS Emerging Markets Metals & Mining Fund (EMT)–are the first of 10 emerging markets ETFs the company plans to introduce.

“For the first time, institutional investors will have a transparent vehicle for gaining sector-based exposure to the emerging markets,” said Robert Holderith, Emerging Global’s founder and CEO.

Based on the Dow Jones Emerging Markets Sector Titans Indexes, the funds “are designed to give investors the ability to execute active investment management strategies in markets where the liquidity to trade is not always available,” said CIO Richard Kang. Because they are listed in the U.S., the Emerging Global Shares ETFs will not be directly affected by any periods of illiquidity or market closings that sometimes occur in emerging markets countries. The ETFs will continue to trade during such events, Kang pointed out, and moreover, they may be borrowed and shorted–a practice sometimes prohibited on emerging markets exchanges.

Nancy R. Mandell, [email protected], is managing editor of Wealth Manager.


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