iShares, the worldâs-largest exchange-traded fund company in the world, is close to launching a broad emerging markets equities ETF focused on small-cap, adding competition to a pocket of the investment universe that is growing every day.
The iShares MSCI Emerging Markets Small Cap Index Fund will trade on Arca, the New York Stock Exchangeâs electronic trading platform under the symbol âEEMS,â and will come with an annual expense ratio of 0.69 percent, the company said in a regulatory filing this week. The revelation of a fundâs trading symbol and price often suggests its launch is coming soon, if not imminent.
EEMS will have a number of competitors, none more direct than the SPDR S&P Emerging Small Cap ETF (NYSEArca:EWX). The State Street fund came to market about three years ago and has an expense ratio of 0.65 percent. A slew of other funds, including a family of small-cap single-country funds from IndexIQ such as one focused on Korea (NYSEArca:SKOR), are also part of a growing menu of choices.
Small-cap companies are generally thought of as a reliable access point to local economies, and in the developing world that means investing in businesses that are catering to the needs of growing middle classes in such countries as Brazil, India and especially China.
As of June 1, the fundâs benchmark, MSCI Emerging Markets Small Cap Index, consisted of issuers in the following 21 emerging market countries:Brazil, Chile, China, Colombia, the Czech Republic, Egypt, Hungary, India, Indonesia, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey.
At that time indexâs three largest industries were industrials, consumer discretionary, and information technology, the filing said.
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