logo
  Join        Login             Stock Quote

EMCR: Egshares Brings New Approach to Emerging Market ETFs

 November 07, 2012 11:52 AM
 


(By Ron Rowland) Emerging Global Advisors launched the EGShares Emerging Markets Core ETF (EMCR) on October 16, 2012.  The new ETF's underlying index, the S&P Emerging Markets Core Index, uses a modified equally-weighted approach and a rules-based methodology.  It attempts to measure the performance of companies that are representative of all industries domiciled in emerging market countries.

With EMCR, Emerging Global Advisors hopes to provide investors with a more diversified solution to emerging markets investing than traditional benchmark funds.  According to the press release (pdf), the underlying index "employs a rigorous methodology designed to reduce exposure to more advanced economies and avoid the industry and country concentrations which are typical of market-capitalization weighted emerging market benchmark indices."

[Related -Staples, Inc. (SPLS): How Q3 Earnings Will Fare?]

Country allocations are capped, and the current largest exposures include China 15.0%, South Africa 15.0%, India 15.0%, Brazil 10.0%, Russia 8.8%, Chile 7.5%, Malaysia 7.5%, and Mexico 7.5%. 

Sector representation is Consumer Staples 17.5%, Consumer Discretionary 17.4%, Financials 16.3%, Industrials 10.3%, Utilities 7.2%, Technology 6.8%, Energy 6.8%, Health Care 6.3%, Materials 6.3%, and Telecommunication 5.3%.

The methodology used by EMCR allows up to 116 holdings but is currently at 108.  The multi-tier equal-weighting methodology currently places most of the holdings at a nominal allocation of 1.25% each.  The complete list of holdings and current weightings can be found here.

[Related -My #1 Tool For Earnings Season]

EMCR's expense ratio is capped at 0.70%, and additional information is in the overview, fact sheet (pdf), and prospectus (pdf).

Analysis/Opinion:  EMCR is an interesting product and manages to differentiate itself from the other 25+ diversified emerging market ETFs in the ETF Field Guide.  EMCR uses the IMF's country classification system rather than the MSCI or the FTSE methodologies employed by the most popular emerging market funds.  Therefore, EMCR's country allocations exclude both Taiwan and South Korea.  Investors building a global equity portfolio will need to get their exposure to those two countries via other ETFs.  Emerging Global Advisors provides additional details about the underlying methodology and its perceived benefits in EMCR: A More Diversified Emerging Market Core Holding (pdf), a 29-page presentation.

The majority of the EGShares product line is currently on ETF Deathwatch.  This new ETF has the potential to escape that fate, but it will need both performance and investor awareness to do so. 

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageApple Inc. (AAPL) Q3 Earnings Preview: A Hiccup in Sentiment?

Apple Inc. (NASDAQ:AAPL) will post its third-quarter 2014 financial results and business after the market read on...

article imageChipotle Mexican Grill, Inc. (CMG) Q2 Earnings Preview: Will Higher Traffic Offset Higher Costs the Key

Chipotle Mexican Grill, Inc. (NYSE:CMG) will host a conference call to discuss second quarter 2014 read on...

article imageNetflix, Inc. (NFLX) Q2 Earnings Preview: The Ruby Month for a Reason

Netflix, Inc. (NASDAQ:NFLX) will post its second-quarter 2014 financial results and business outlook on its read on...

article imageLadenburg Thalmann Financial Services (NYSEMKT:LTS): Heavy, Durable Insider Buying

Ahh, but any worries over price levels didn’t stop multiple insiders at Ladenburg Thalmann Financial read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.