Van Eck, the exchange traded fund (ETF) innovator, is pulling together a fund that will track the country of Mongolia. The paperwork has been filed with The Securities and Exchange Commission for the Market Vectors Mongolia ETF.
According to the filing, the fund will invest about 80% of revenue into companies based or listed in Mongolia, or if based elsewhere, about half of their profit must be derived from business activity in the country. Oliver Ludwig for Index Universe reports the index, expense ratio and ticker have not yet been determined, however, sectors represented include basic materials, energy and industrials.
Mongolia is located between China and Russia, and is known for its copper-rich land. As strong demand for copper is anticipated while emerging markets continue to flourish, the exposure to copper may be worth a look through this fund. This ETF could become a good play for copper exposure, while giving the diversification of a frontier market.
The biggest struggle for the Mongolian economy is geopolitical risk, such as the latest uprising in inner Mongolia. The latest “Jasmine Revolution” came amid a nationwide protest against lawyers, bloggers and dissidents, who were following the movement. Many Mongolians are against the Chinese Han, accounting for 80% of the population, which is symbolic of the wipeout of the traditional Nomadic culture native to Mongolia and it’s natural grasslands, which are disappearing, reports Brian Spegele for The Wall Street Journal.
For more information on copper, visit our copper category.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.