As investor interest for traditional developed markets such as America, Europe, and Japan continues to wane, many are putting money to work in rapidly-expanding emerging markets that account for a huge portion of global GDP growth. While a big chunk of these emerging market inflows have gone towards the BRIC nations of Brazil, Russia, India, and China, many have sought out compelling investment opportunities elsewhere in the developed world, including Malaysia, South Africa, and Colombia.
Beyond the BRIC, most emerging markets ETF options are country-specific funds. But Global X, which has already launched a handful of new ETFs this year, has plans for more broad-based emerging market options not currently available to U.S. investors. The New York-based issuer recently filed details on three new emerging market funds, as well as one product that hits closer to home. The filings were light on details, but shed some light on products that may soon be coming down the pipeline:
Global X FTSE Andean 30 ETF
Some of the world’s hottest equity markets are in South America–but outside of Brazil. This proposed fund would track the FTSE Andean 30 Index, a benchmark that includes the 30 largest companies in Chile, Colombia, and Peru. The index is free-float adjusted and weighted by market capitalization. Currently, there are single-country ETFs available to each of these economies: ECH (Chile), GXG (Colombia), and EPU (Peru). There are also a handful of broad Latin America ETFs, but many of those are dominated by Brazilian equities [see Emerging Market ETFs: Seven Factors Every Investor Should Consider].
Global X FTSE ASEAN 40 ETF
Interest in Southeast Asian investing has surged over the past few years as the region has weathered the financial storm better than most. Even developed market Singapore has seen its GDP growth surge to incredible levels, while less developed markets such as Indonesia and Malaysia have also delivered impressive gains for investors. While individual country ETFs exist for each of the five main ASEAN nations, this fund would represent the first time that they can all be accesses in one ticker.
The proposed fund would track the FTSE/ASEAN 40 Index, a benchmark that measures the performance of the 40 largest companies in the five ASEAN regions: Indonesia, Philippines, Singapore, Malaysia and Thailand. The index is free-float adjusted and weighted by market capitalization and designed using eligible stocks within the FTSE All-World universe [also read Looking For Green Shoots? Try Southeast Asian ETFs].
Global X Next 11 ETF
Goldman Sachs, the company that first coined the term “BRIC,” has also proposed an investment thesis behind a bloc of economies known as the ‘Next Eleven’ countries. Goldman maintains that this group may not have the scale to have a BRIC-like impact, but could rival the G7 and become among the largest economies in the world. Many of the countries on the list do not have any ETF exposure, so a fund that invests in all eleven of them could generate significant interest among investors. In order to track the ‘next eleven’ countries of Egypt, Bangladesh, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey and Vietnam, this proposed ETF would replicate the Solactive Next 11 Index.
Only shares open to foreign ownership by U.S investors are eligible for inclusion in this benchmark, meaning that the ETF would focus on ten economies–Iran would be excluded. The benchmark is comprised of common stocks, ADRs and GDRs of selected companies globally that are domiciled or have their main business operations in the N-11 countries [see the Emerging Markets ETF Center].
Global X S&P/TSX Venture ETF
In addition to the three emerging market funds, Global X has also proposed a fund that targets the TSX Venture exchange in Canada. The TSX Venture Exchange is a component of the Toronto Stock Exchange that focuses in on small, emerging companies allowing them to obtain capital easily and cheaply. The index has over 2,000 companies with a combined market cap over $40 billion. The proposed ETF would track the S&P/TSX Venture 30 Index, which consists of the 30 most liquid securities of the S&P/TSX Venture Composite Index. Eligible securities must have market capitalizations of at least $100 million, and must trade at least 100,000 shares in each of the previous six months [also read Do You Need A Canada ETF?].
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Disclosure: No positions at time of writing.