State Street, a US-based ETF provider, is planning to launch a new SPDR MSCI Beyond BRIC ETF that could give investors a fresh way to tackle emerging market securities outside the BRIC countries.
The proposed ETF looks to follow the MSCI Beyond BRIC Index using sampling strategy.
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The index will focus on 17 developing countries (excluding BRIC) including Chile, Colombia, the Czech Republic, Egypt, Hungary, Indonesia, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, South Africa, South Korea, Taiwan, Thailand and Turkey.
This will give the ETF broad exposure to a number of countries, which are usually overlooked in many other emerging market funds.
The new fund, if approved, could be an interesting choice for investors seeking diversified exposure in the global ex-developed market.
This new ETF would allow investors to tap the still beaten down emerging economies that are showing clear signs of a quick recovery.
In fact, the two ultra-popular funds – Vanguard FTSE Emerging Market ETF (VWO) and iShares MSCI Emerging Markets Index Fund (EEM), have seen combined outflows of over US$3.3 billion in the last three months. Holdings in the four BRIC countries for EEM and VWO make up at least 38% of assets, suggesting this proposed EMBB could have a very different risk-return profile.
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By GlobalData
