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Emerging Global Advisors (EGA), the asset manager to the EGShares exchange-traded fund line-up, has completed the transition of the EGShares Beyond BRICs ETF (BBRC) to track the FTSE Beyond BRICs Index.
Launched in August 2012, the fund previously tracked the Indxx Beyond BRICs Index, an index which only includes emerging market stocks.
The FTSE Beyond BRICs Index generally has 75% exposure to companies in more developed emerging markets (excluding Brazil, Russia, India, China, South Korea and Taiwan) and 25% exposure to companies in frontier markets, which are less developed.
As defined by FTSE, frontier markets include countries such as Bangladesh, Bulgaria, Jordan, Kenya, Nigeria, Qatar, Sri Lanka, and Vietnam.
While the index is free-float market capitalization-weighted, it addresses potential concentration issues by including diversification parameters such as position and country caps, as well by liquidity-ranking the frontier markets company exposure.
Commenting on the transition, Marten Hoekstra, CEO of EGA, said: “BBRC seeks to provide investors with an integrated developing market core holding that shifts toward the less mature emerging and frontier markets and away from where much growth has already taken place. Beyond BRIC economies offer greater portfolio diversification to BRIC-heavy portfolios and, in our view, represent the next wave of growth in developing market investing.”
Jonathan Horton, President of FTSE North America and Head of FTSE’s ETP Service Unit, added: “We are delighted to have had the opportunity to work with Emerging Global Advisors to expand the BBRC offering to include frontier markets. Tradability, transparency and strong governance are at the core of our index design. FTSE continues to offer a holistic solution for ETF issuers seeking to provide diverse investment opportunities in both emerging and frontier markets.”
The fund is listed on the NYSE Arca and has an expense ratio of 0.85%.