Emerging Global Advisors has launched the EGShares Emerging Markets Core ETF, an exchange-traded fund that aims to provide a diversified core approach for investors seeking broad exposure to emerging market equities.
The EGShares Emerging Markets Core ETF is the only ETF that tracks the S&P Emerging Markets Core Index, an index designed as an investment index rather than a benchmark. The S&P Emerging Markets Core Index has less industry and mature economy concentration than conventional benchmarks such as the MSCI Emerging Markets Index and the FTSE Emerging Index.
The initial concept for the S&P Emerging Markets Core Index was conceived by Emerging Global Advisors. The index, designed, calculated, published and maintained by S&P Dow Jones Indices, seeks to avoid the industry and mature economy concentrations of conventional benchmarks which result from their market-cap weighting approach, in addition to their inclusion of developed economy constituents. It seeks to reduce concentration in legacy frontier market industries, broaden country diversification and tap into available liquidity to gain exposure to potentially emerging industries. The rules-based index focuses on industry groups as index building blocks, contains no developed economy constituents and adopts an equal weighting modified by a country-capping approach.
“In the last decade, conventional benchmarks have been increasingly used as substitutes for portfolios,” says Marten Hoekstra, chief executive of Emerging Global Advisors. “A consequence of this in portfolios is industry concentrations that are a legacy of the historical maturation of emerging markets. We believe investors continue to respect the value of these indices as benchmarks, but in their own portfolios prefer to have a more diversified approach. We think EMCR and the S&P Emerging Markets Core Index meet that need.”
"The S&P Emerging Markets Core Index is a differentiated choice that expands the tools available to emerging market investors," says Michael Orzano, associate director, global equity indices at S&P Dow Jones Indices. "It employs a rigorous methodology designed to reduce exposure to more advanced economies and avoid the industry and country concentrations which are typical of market-capitalisation weighted emerging market benchmark indices."
EGShares Emerging Markets Core ETF trades on NYSE Arca under the ticker symbol EMCR. The ETF is passively managed and currently does not use options, swaps or other derivatives in its portfolios.