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EGShares launches emerging markets high income/low beta equity ETF on NYSE Arca


Emerging Global Advisors, an asset management company focused exclusively on emerging markets and the sub-advisor to the EGShares family of exchange-traded funds (ETFs), has launched HILO, an emerging markets fund designed to be significantly less volatile than funds based on the broad-based MSCI Emerging Markets Index. The ETF trades on NYSE Arca under the ticker symbol HILO.

HILO is designed to replicate the INDXX Emerging Market High Income Low Beta Index, which has a yield of 4.99 percent2. The 30-stock index was created from a universe of more than 2,500 companies from 21 countries that are screened for market capitalisation, average daily trading value, dividend yield, consistency of dividend payments, and both beta and correlation to local benchmarks. HILO is passively managed and doesn’t use options, swaps, or other derivatives in its portfolio. The underlying INDXX is rebalanced annually in September.

“Investors are increasingly using emerging markets to execute portfolio strategies that they also use in developed countries,” says Robert C Holderith (pictured), EGA’s founder and president. “HILO seeks to enable dividend stock buyers who want less volatility than the broad emerging markets indices to get exposure that is more likely to fit their objectives.”

HILO has 11 country exposures. Approximately 32 per cent are in diversified telecommunication services and wireless telecommunications services. The remaining companies operate in a wide spectrum of sectors, ranging from oil, gas, and consumable fuels to communications equipment and food products

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