Global X Debuts Emerging & Frontier ETF (EMFM); ASHR and DXKW Launch

by on November 8, 2013 | ETFs Mentioned:

Wall Street was in for several up and down sessions this week, with the Dow Jones Industrial Average posting another record on growing hopes of continued easy-money policies from the Fed. St. Louis Fed President James Bullard stated it was “certainly possible” that the central bank could scale back its bond-buying purchases after the next policy meeting ending December 18, but only if the labor market shows signs of improvement. On the economic front, factory orders declined 0.1%, while ISM non-manufacturing PMI rose to 55.4 from 54.4 in October [see Which ETFs Will Own Twitter].

In ETF news, issuers continued to fill the product pipeline, rolling out several new funds this week.

Global X launched a new emerging markets equities ETF with a “twist”:Vietnam

  • Next Emerging & Frontier ETF (EMFM): This fund tracks the Solactive Next Emerging & Frontier Index, which is designed to offer exposure to both emerging and frontier markets. The fund defines emerging market countries as those that go beyond the BRICs (Brazil, Russia, India and China) and beyond the most developed tier of emerging markets, meaning countries like South Korea and Taiwan are excluded. The frontier markets featured in EMFM include Argentina, Bangladesh, Kazakhstan, Slovakia, and Vietnam. EMFM charges an expense ratio of 0.58%, the lowest fee among the Frontier Markets ETFs.

Following PowerShares’ launch of CHNA in October, Deutsche Asset & Wealth Management debuted its new China A-shares fund:

  • Harvest CSI 300 China A-Shares Fund (ASHR): This fund tracks the CSI 300 Index, which consists of 300 A-Share stocks listed on the Shenzhen or Shanghai Stock Exchange. Unlike the other A-shares focused funds, PEK and CHNA, ASHR is the only fund that directly invests in A-shares. Because of regulations, the A-share market has been off limits to foreign investors, except for those granted a qualified foreign institutional investor (QFII) status. Because ASHR’s sub-advisor, Harvest Global Investments, has obtained a renminbi QFII (RQFII), the fund is able to hold physical A-shares instead of using swap agreements. The direct exposure, however, does come at a steeper price tag, with ASHR’s expense ratio coming in at 1.08% [see 7 Emerging Market ETFs Crushing It In 2013].

WisdomTree added yet another fund to its lineup of currency-hedged ETFs:

  • Korea Hedged Equity Fund (DXKW): This ETF tracks the WisdomTree Korea Hedged Equity Index, which is designed to provide exposure to equity securities in Korea, while at the same time hedging exposure to fluctuations between the value of the U.S. dollar and the Korean won. One-quarter of DXKW’s portfolio consists of industrials equities, while materials, consumer discretionaries, and information technology are allocated roughly 20%. DXKW’s top holdings currently include Samsung, Hyundai, Kia Motors, LG Chem, and Posco.

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Disclosure: No positions at time of writing.