State Street Global Advisors (SSgA) has listed a new exchange-traded fund on the Deutsche Borse Xetra – the SPDR MSCI EM Beyond BRIC UCITS ETF.
The new ETF will track the MSCI EM Beyond BRIC Index providing investors with access to smaller emerging markets outside the BRIC region.
The index includes all MSCI emerging market classified countries except for the BRIC countries – Brazil, Russia, India and China. The index is a standard market capitalisation index with a 15 per cent cap on individual countries.
The BRIC countries have been the prime drivers of performance among emerging markets in the past, but have by now taken on many of the characteristics of developed economies thanks to significant growth over the last decade. These attributes include greater inclusion, correlations and dependence on the global developed economy.
Eleanor Hope-Bell, head of SPDR UK for SSgA, says: “Smaller emerging market economies contain many of the characteristics and valuations that the BRIC economies had ten years ago. These countries have large populations with a growing middle class, high economic growth, increasingly sophisticated financial and more stable political systems.
“Many active emerging market strategies generate alpha by underweighting BRIC markets and overweighting smaller emerging markets. However, SSgA has created a new ETF focusing only on those smaller markets as a way of providing investors with a tactical investment tool to help manage their emerging market exposure.”
Deborah Yang, managing director and head of the MSCI index business in EMEAI, adds: “We are delighted that SSgA has licensed the MSCI EM Beyond BRIC Index as the underlying index for their new ETF, and are very pleased to strengthen our working relationship with them in Europe.
“The MSCI EM Beyond BRIC Index was launched in response to client demand and we believe that it offers a new way of tracking and evaluating the emerging markets opportunity for those wishing to invest in countries outside the BRIC region.”