Global X ETFs has completed the conversion of two mutual funds into two actively managed emerging markets ETFs. The Global X Emerging Markets Great Consumer ETF (NYSE Arca: EMC) and the Global X Emerging Markets ETF (NYSE Arca: EMM) begin trading today.
According to Global X, emerging market economies are shifting from asset-heavy, relatively low-return business models toward more profitable sectors like healthcare, technology, and education. While these markets have significant growth potential, some investors have avoided the space due to concerns over volatility.
However, emerging markets exposure can achieve high levels of long-term growth. By converting these two mutual funds, the firm can offer investors EM exposure via ETFs.
“Demand for actively managed ETFs has been picking up in 2023,” said VettaFi’s head of research Todd Rosenbluth. “It is great to see Global X provide emerging market products with enhanced liquidity and tax efficiency benefits compared to mutual funds.”
Global X: Long-Standing Roots in Emerging Markets
Global X affiliate Mirae Asset Global Investments previously advised the predecessor funds and will actively manage the ETFs. EMC and EMM will follow substantially similar investment strategies as the predecessor funds.
Global X’s CEO Luis Berruga said in a news release that the first fund that the firm launched was an emerging markets ETF. Berruga added that EMC and EMM’s conversions underscore “the firm’s long-standing roots in the emerging markets space.”
EMC aims to capture a structural shift across developing markets, as GDP profiles move away from exports and towards domestic consumption-driven growth. Malcolm Dorson, Joohee An, and Sol Ahn manage the fund.
EMM, meanwhile, is a broad market fund focused on bottom-up fundamental equity analysis. It takes a tactical and opportunistic approach to investing.
EMM targets a broad range of sectors and emerging markets that have the potential to achieve high levels of growth over the long term. The fund focuses on quality across sectors and regions. Malcolm Dorson, Rahul Chadha, and Phil Lee are the fund’s portfolio managers.
“A number of long-term tailwinds look set to bolster the case for active emerging markets exposure, which require a very different investment approach than developed markets do,” added senior portfolio manager Malcolm Dorson.
Both funds have an expense ratio of 0.75%.
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