Redwood Asset Management has launched the Redwood Emerging Markets Dividend ETF (REM) on Aequitas NEO Exchange in Canada.

REM targets high-quality, income-generating companies from emerging markets.

The actively managed fund targets exposure to high-quality, income-generating companies in developing countries while seeking lower volatility compared to the broad EM universe. According to the fund’s prospectus, the manager of the fund will focus on companies that grow free-cash flow and dividends, providing a value-oriented approach with a focus on downside protection. The document also states the fund may take contrarian stances, opportunistically investing in high-quality, sustainable companies when the country of domicile is out of favour.

South Korea is by far the largest country exposure with a 22.0% weight, followed by Taiwan (9.1%), India (9.0%), Hungary (8.3%) and Turkey (7.4%). Financials (29.1%) and consumer discretionary (26.2%) dominate the fund’s sector exposures, followed by information technology (15.7%) (data as of the end of July 2017).

“This ETF is designed to provide investors with exposure to the long-term growth of emerging markets, in a strategy that mitigates volatility and provides current income,” said Peter Shippen, president and chief executive officer of Redwood. “We are delighted to broaden our partnership with NEO today, and look forward to continuing to grow our relationship in the months ahead.”

Jos Schmitt, president and chief executive officer, NEO Exchange, added “NEO and Redwood are partners who subscribe to unconstrained thinking to foster innovative solutions. We both strive to meet the needs of our clients while doing what we believe is right for the investment community. We are pleased to be growing our relationship with Redwood today. Their repeated commitment to NEO is a testament to the work we are doing to level the playing field for all investors, while promoting liquidity for investment products.”

REM has a management fee of 0.90%. Its launch brings the number of Redwood ETFs listed on Aequitas NEO to seven.