VelocityShares rolls out emerging markets depositary receipt ETFs

Apr 8th, 2013 | By | Category: Equities

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VelocityShares, a US-based provider of exchange-traded products best known for its VIX ETNs, has rolled out three exchange-traded funds (ETFs) providing exposure to various emerging markets via American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs).

VelocityShares rolls out emerging markets depositary receipt ETFs

VelocityShares has rolled out three emerging markets depositary receipt ETFs, including one tracking Russian stocks.

The funds, which have been listed on the Nasdaq Stock Market and are linked to BNY Mellon DR Indices, provide access to broad emerging markets, emerging Asia, and Russia.

The funds are: the VelocityShares Emerging Market DR ETF (EMDR), indexed to the BNY Mellon Emerging Market DR Index; the VelocityShares Emerging Asia DR ETF (ASDR), indexed to the BNY Mellon Emerging Asia DR Index; and the VelocityShares Russia Select DR ETF (RUDR), indexed to the BNY Mellon Russia Select DR Index.

Nick Cherney, Chief Investment Officer and co-founder of VelocityShares, said: “As investors look to further diversify their portfolios there is increased interest in emerging market equities, and American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) enable investors to access emerging market equities with the comfort of developed market securities regulation.”

Christopher Kearns, chief executive of BNY Mellon’s depositary receipts business, added: “Depositary receipts offer investors seeking diversification a highly efficient and convenient mechanism to invest globally. Our commitment to product innovation in the DR space can be seen by the growing number of ETFs benchmarked to the family of BNY Mellon DR Indices.”

Depositary receipts are issued by a bank that purchases shares of a non-US company and issues shares based on the foreign holdings. ADRs are depositary receipts that trade on a US exchange and thus are subject to registration and disclosure requirements under the Securities Acts of 1933 and Securities Exchange Act of 1934, each as amended.

GDRs are similar to ADRs, but may be issued in bearer form and are typically offered for sale globally and held by a foreign branch of an international bank. GDRs are traded on the London Stock Exchange.

The funds each have total annual fund operating expenses of 0.65%.

The launch of these three funds represents VelocityShares’ first foray into ETFs, having previously focused on exchange-traded notes (ETNs). The firm has also filed paperwork with the US Securities & Exchange Commission to launch a couple of hedged large-cap funds, namely the VelocityShares Tail Risk Hedged Large Cap ETF and VelocityShares Volatility Hedged Large Cap ETF, which combine S&P 500 and volatility ETFs.

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