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Friday, July 24, 2009

Emerging Global Advisors Launches Emerging-Market ETF

Investment firm Emerging Global Advisors launched an emerging-market exchange-traded fund this week, joining a growing number of firms keen on combining the appeal of developing-world equities and ETFs.

The firm launched the Emerging Global Shares Dow Jones Emerging Markets Titans Composite Index Fund (EEG) on Wednesday. Fifteen emerging markets countries are represented in the index, ranging from China Offshore and Brazil to Egypt and Slovenia.

Interest in emerging-market ETFs has increased in recent months as investors looked for cheaper and quick access to developing-world stocks.

Emerging Global Advisors has already registered nine funds with the Securities and Exchange Commission in such emerging-market sectors as financials, telecoms and consumer goods, but have yet to decide which of those will be officially launched, company officials said.

So far in 2009, various companies have launched a total of 11 emerging-market ETFs, according to research analyst Mark Komissarouk at Morningstar. That count doesn't include the three started by Emerging Global Advisors, as two existing funds are listed under the natural resource category and the newest addition hasn't been recorded yet.

ETFs in general provide a platform for playing "with niche exposures for sophisticated investors," said Richard Kang, chief information officer of Emerging Global Advisors. ETFs are like mutual funds but their shares are traded like stocks.

"Turnover in ETFs is a matter of minutes, not hours or days" like traditional funds, Kang said.

The company launched its two other sector-specific ETFs in May. The EGS Emerging Markets Energy Fund (EEO) includes companies in the oil and gas industry across 13 countries. Their EGS Emerging Markets Metals & Mining Fund (EMT) includes companies in the metals and mining sector across nine countries.

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