Global X, the New York-based ETF issuer known for its suite of commodities, income and international funds, could introduce an ETF that would offer investors combination exposure to both emerging and frontier markets under the umbrella of one fund.
The Global X Next Emerging & Frontier ETF, if it comes to market, will trade on the New York Stock Exchange under the ticker “EMFM”and track the Solactive Next Emerging & Frontier Index, reports Hung Tran for Index Universe.
A Global X spokesperson said like many of the firm’s existing emerging market funds, it would set up custodian accounts in the countries and directly purchase shares. There would also be a small amount of American depositary receipts (ADRs) and global depositary receipts (GDRs).
The Solactive Next Emerging & Frontier Index excludes the BRIC nations as well as South Korea and Taiwan, which are viewed as highly developed emerging markets. EMFM will have exposure to Argentina, Bangladesh, Chile, Colombia, Czech Republic, Egypt, Gabon, Georgia, Hungary, Indonesia, Kazakhstan, Kenya, Kuwait, Laos, Malaysia, Mauritius, Mexico, Mongolia, Namibia, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Peru, Philippines, Poland, Qatar, Slovakia, Tanzania, Thailand, United Arab Emirates and Vietnam, as well as South Africa and Turkey, according to Index Universe.
The idea of combination emerging/frontier markets ETF is not new. While the Guggenheim Frontier Market ETF (NYSEArca: FRN) is heavily allocated to emerging markets, the fund does feature exposure to nations classified as frontier such as Argentina and Nigeria.
Last week, EGShares said its EGShares Beyond BRICs ETF (NYSEArca: BBRC) will drop the Indxx Beyond BRICs Index in favor of the FTSE Beyond BRICs Index, a move that will allow BBRC to expand its lineup to as many as 75 stocks from 50 along with allowing for the inclusion of frontier markets. [BRIC ETF to Get More BRIC Feel]
Global X is no stranger to frontier markets ETFs. The firm is the issuer behind the only single-country Argentina and Nigeria ETFs as well as the first multi-country ETF focused on central Asia. The Global X Nigeria Index ETF (NYSEArca: NGE) and the Global X Central Asia & Mongolia Index ETF (NYSEArca: AZIA) debuted in April. [Global X Launches Central Asia, Nigeria ETFs]