First Asset rolls out new Morningstar emerging markets bond ETF on TSX

Oct 3rd, 2012 | By | Category: Fixed Income

First Asset Exchange Traded Funds, a leading Canadian ETF provider, has announced that First Asset Morningstar Emerging Markets Composite Bond Index ETF (EXM) has commenced trading on the Toronto Stock Exchange.

First Asset rolls out new Morningstar emerging markets bond ETF on TSX

The fund provides exposure to dollar-denominated bonds issued by governments and corporations in Latin America, emerging Europe, Africa, the Middle East and Asia.

The fund has been designed to provide Canadian investors with economic exposure to the performance of the Morningstar Emerging Markets Composite Bond Index.

This index includes the most liquid sovereign and corporate bonds issued in US dollars by governments and corporations in Latin America, emerging Europe, Africa, the Middle East and Asia.

As of launch date, the fund had approximately 53.5% allocated to corporate bonds and 46.5% allocated to sovereign bonds.

On the corporate side, major names included Petrobras, Petroleos Mexicanos, Vale, Kazmunaygas National, Hutchison Whampoa, Gazprom and Lukoil. On the sovereign side, major country holdings included Russia, Indonesia, Turkey, Brazil, Mexico, Turkey, Korea and the Philippines.

The index had a weighted average coupon of 6.63%, a yield to maturity of 4.41% and an average effective duration 6.28. The average credit rating of constituents was BBB, what Standard and Poor’s defines as having an “adequate capacity to meet financial commitments, but more subject to adverse economic conditions.”

Commenting on the launch, Barry Gordon, President and CEO of First Asset, said: “EXM provides investors with tax-efficient exposure to enhanced yields currently offered by the emerging markets debt sector, leveraging Morningstar’s investment research in a low-cost, liquid vehicle”

He added: “Morningstar is world renowned for the integrity of its research and First Asset is pleased to have EXM join the other First Asset ETFs we launched earlier this year based on Morningstar’s proprietary indexes.”

The fund has both common and advisor share classes and trades under the ticker symbols EXM and EXM.A. The common class units (EXM) have a management fee of 0.50%, while the advisor class (EXM.A) charges 1%.

First Asset Exchange Traded Funds was formerly called XTF Capital and is part of Toronto-Based First Asset Capital Corp.

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