Van Eck Plans Small-Cap Emerging Market ETF

By Olivier Ludwig,

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Van Eck Global, the New York-based money management firm known mostly for its commodities strategies, filed with the Securities and Exchange Commission to offer a small-cap equity ETF focused on the developing world, another sign of the increasingly nuanced approach to emerging markets investing.

The Market Vectors GDP Emerging Markets Small-Cap Equity ETF will be based on the Market Vectors GDP - Emerging Markets Small-Cap Equity Index. The benchmark weights its constituents by the size of a given country's gross domestic product ( GDP ) relative to the GDPs of the other countries represented in the index. The company didn't say in the filing which countries will be included in the index, but noted that the fund's indexing methodology tends to favor countries with larger economies, such as Russia or China.

The fund is the latest example of increasingly nuanced emerging markets strategies aimed at trying to profit from rapid rates of growth in the developing world. While last year's most popular U.S.-listed fund was the broad-based Vanguard MSCI Emerging Markets ETF (NYSEArca:VWO), the space is now being sliced and diced around size, style and single countries. The new fund will compete with funds such as the SPDR S&P Emerging Markets Small Cap ETF (NYSEArca:EWX), which has $620 million in assets.

In the filing, Van Eck didn't disclose the proposed fund's ticker symbol or its annual expense ratio.

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This article appears in: Investing ETFs
Referenced Stocks: EWX , GDP , VWO

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