Emerging Global Advisors, the New York-based money management
firm focused solely on sponsoring
strategies targeting the developing world, filed regulatory
paperwork detailing 12 new proposed funds, including six bond
funds-its first completely in-house fixed-income strategies.
The distinction of the six proposed bond funds being the firm's
first is something of a fine point, but still worthy of noting. The
company has begun to reveal its fixed-income plans in the past year
by putting into registration "balanced" ETFs that would make use of
other fixed-income ETFs in a fund-of-funds structure.
But this week's two filings-which also include four
sector-focused equity funds, another fund that targets
consumer-related companies in Asia and a dividend-focused equities
fund, detail fixed-income funds that will be created in-house using
individual bonds and indexes that have yet to be named.
That's important, because Emerging Global is, ironically, a
latecomer to the world of emerging market fixed-income ETFs. After
all, the $2 billion WisdomTree Emerging Markets Local Debt Fund
(NYSEArca:ELD) is something of a blockbuster, as is the $1.5
billion Market Vectors Emerging Markets Local Currency Bond ETF
(NYSEArca:EMLC). Both came to market in the summer of 2010.
Most of the funds are in tune with a newer approach at Emerging
Global that features a particular focus on
emerging markets-as opposed to a targeting of specific countries.
The granularity comes in the form of, say, style, or in the case of
the bond funds, to a certain kind of bond with a fixed maturity
range. Also, the plan to market income-focused funds speaks to
current concerns that the post-crash era of financial repression
created by central banks has made finding decent yield in the U.S.
Another peculiarity worth mentioning is that the four
sector-focused strategies are organized as two pairs of "tactical"
and "strategic" counterparts-with the distinction being that one
pair would be actively managed and the other pair would be based on
When fund companies cast such a wide net at the start of the
regulatory permissioning process, it often means not all the
strategies will, in the end, see the light of day. But it's also
possible that the funds will all one day be launched, with Emerging
Global picking its spots along the way when it senses a propitious
moment for a given launch.
The proposed funds came in two filings dated May 1, 2013-neither
of which named tickers or annual expense ratios. The first of the
two filings included the following eight funds:
- EGShares EM Bond Investment Grade Short Term ETF
- EGShares EM Bond Investment Grade Intermediate Term ETF
- EGShares EM Bond Investment Grade Long Term ETF
- EGShares EM Dividend High Income ETF
- EGShares EM Strategic Sector Allocation ETF (passive
- EGShares EM Tactical Sector Allocation ETF (passive
- EGShares EM Asia Consumer ETF
- EGShares EM Equal Weight Sector ETF
The second filing included the following four funds:
- EGShares EM Bond Investment Grade ETF
- EGShares EM Strategic Sector Allocation ETF (active)
- EGShares EM Bond ETF
- EGShares EM Tactical Sector Allocation ETF (active)
About 70 percent of Emerging Global's $1.36 billion in total
assets under management are in one fund, the EGShares Emerging
Markets Consumer ETF (NYSEArca:ECON). The fund's assets are now
about $1 billion, according to data compiled by IndexUniverse.
The proposed EGShares EM Asia Consumer ETF detailed in the first
filing thus looms as a likely attempt by the firm to replicate the
Midas touch of ECON in countries experiencing echo booms related to
China's meteoric rise of the past 30 years.
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