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Emerging Global Advisors (EGA), the asset manager to the EGShares suite of emerging markets-focused exchange-traded funds (ETFs), has revealed that it will close 12 NYSE Arca-listed funds.
The funds to close represent approximately 4% of EGA’s assets under management.
Eleven of the terminating funds are based on Dow Jones Emerging Markets Sector Titans Indices and offer exposure to the 30 largest emerging market companies within each industry sector, as defined by the Industry Classification Benchmark (ICB), weighted by float-adjusted market capitalisation, revenue and net profit. A twelfth fund is based on a composite index which tracks the 10 top ranked stocks from each of main sector indices.
Commenting on the closures, Robert Holderith, founder of EGA, said: “EGA provides investors with tools that address developing markets allocation needs. As part of this ongoing commitment and our regular product line review, we identified an opportunity to streamline our existing offering. These changes are consistent with our dedication to delivering tools that fulfil unmet investor needs.”
Reflecting this ongoing commitment, EGA recently launched two additions to their dividend suite, the EGShares Emerging Markets Dividend Growth ETF (EMDG), the first emerging markets dividend growth ETF, and the EGShares EM Dividend High Income ETF (EMHD).
Despite the lacklustre asset-gathering performance of the terminating funds, EGA’s market share has continued to grow this year with EGShares ETFs gathering over $408 million in net new assets while emerging market equity ETF assets in general have suffered more than $12.5 billion in net outflows as of September 4, 2013.
In terms of mechanics, on-exchange trading for the shares of the terminating ETFs will be suspended prior to the open of business on Monday, 7 October, 2013. Shareholders may sell their holdings on or before Friday, 4 October, 2013 and may incur customary brokerage charges. Shareholders who do not sell their holdings on or before 4 October, 2013 will receive cash equal to the amount of the net asset value of their shares.
The funds affected are:
EGShares Financials GEMS ETF (FGEM)
EGShares Consumer Goods GEMS ETF (GGEM)
EGShares Health Care GEMS ETF (HGEM)
EGShares Industrials GEMS ETF (IGEM)
EGShares Basic Materials GEMS ETF (LGEM)
EGShares Energy GEMS ETF (OGEM)
EGShares Technology GEMS ETF (QGEM)
EGShares Telecom GEMS ETF (TGEM)
EGShares Utilities GEMS ETF (UGEM)
EGShares Consumer Services GEMS ETF (VGEM)
EGShares Emerging Markets Metals & Mining ETF (EMT)
EGShares GEMS Composite ETF (AGEM)