Van Eck, the New York-based fund provider known for its family of Market Vectors ETFs, filed paperwork with U.S. regulators to market an Asian ex-Japan bond fund that would go head-to-head with a WisdomTree newcomer.
Van Eck is not new to emerging markets debt. The company already manages the broadly diversified Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca:EMLC), which has amassed some $345 million in assets in less than a year since its inception.
But the new fund would target Asia in a strategy very much like the WisdomTree Asia Local Debt (NYSEArca:ALD), an ETF that has attracted almost $259 million in assets in less than two months. ALD's success follows on WisdomTree's other emerging markets debt fund, the broad-based WisdomTree Emerging Markets Local Debt ETF (NYSEArca:ELD), which now boasts nearly $1 billion in assets gathered since its August 2010 inception. ELD and Van Eck's EMLC are direct competitors.
Emerging-markets-themed ETFs continue to strike a chord with U.S. investors as they look for growth and value opportunities across the globe at a time when the U.S. is still struggling to stage a solid recovery from its 2008 credit crisis. The Asia-Pacific region, ex-Japan, is quite attractive because it's often underrepresented in most portfolios, even though it's one of the fastest-growing regions in the world.
Van Eck's new fund will track through representative sampling the Asia ex-Japan Aggregate Bond Index, which consists of sovereign and corporate bonds denominated in either U.S. dollars or local currencies issued in Asia.
The index includes securities from China, Hong Kong, India, Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand, the filing said. Countries eligible for inclusion must be classified as having low- or middle-range per capita income by the World Bank for at least two consecutive years.
The filing didn't provide fees or ticker information. It also didn't disclose the index provider. EMLC has an annual expense ratio of 0.49 percent, while both WisdomTree's ELD and ALD come with a price tag of 0.55 percent.
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