Emerging Global Advisors To Shut 12 ETFs

IndexUniverse.com

Emerging Global Advisors, a fund provider known for its focus on emerging markets, is shuttering 12 of its ETFs that make up about half of its entire lineup of funds though only 4 percent of its assets, a moved aimed at dealing with funds that weren’t gathering assets at a time when the entire firm is.

The decision to close the dozen dead-weight funds comes in a year that the firm has pulled in $408 million in fresh assets, while all emerging markets ETFs have suffered outflows of $12 billion amid investor concerns about slowing growth in the region and the potential impact a U.S. Federal Reserve tapering of quantitative easing could have on capital flows into those emerging economies.

Among the funds being liquidated, the firm’s entire global sector-specific GEMS suite as well as a metals and mining fund make the list that will close for trading on Oct. 4. Combined assets in the ETFs being liquidated amount to just 4 percent of EGShares’ total ETF assets, the company said.

The decision to “streamline” its product lineup comes just weeks after EGShares launched two dividend-focused funds, the EGShares Emerging Markets Dividend Growth ETF (EMDG), and the EGShares EM Dividend High Income ETF (EMHD), which came to market in July.

The firm’s most successful fund is the nearly three-year-old Emerging Markets Consumer ETF (ECON)—a strategy that has more than $1 billion in assets, and represents roughly 75 percent of the firm’s total ETF assets. Moreover, the fund has pulled in $375 million this year, or more than 90 percent of the $408 million in inflows for the entire firm this year.

Trading on the 12 funds will end Oct. 4. Shareholders may sell their holdings on or before that date, and they may incur brokerage fees for doing so, the company said. Those who do not liquidate their positions will receive cash equal to the amount of the net asset value of their shares.

Each closing ETF may also pay a final “clean-up distribution” of any accrued capital gains and income to shareholders on the last trading day, the company said.

 

Fund

Ticker

EGShares GEMS Composite

AGEM

EGShares Financials GEMS

FGEM

EGShares Consumer Goods GEMS

GGEM

EGShares Health Care GEMS

HGEM

EGShares Industrials GEMS

IGEM

EGShares Basic Materials GEMS

LGEM

EGShares Energy GEMS

OGEM

EGShares Technology GEMS

QGEM

EGShares Telecom GEMS

TGEM

EGShares Utilities GEMS

UGEM

EGShares Consumer Services GEMS

VGEM

EGShares Emerging Markets Metals & Mining

EMT

 

 

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