The Guggenheim BRIC ETF (EEB) is set to get more of a BRIC feel when issuer Guggenheim changes EEB’s index in October. EEB, which is nearly seven years old and home to $214.7 million in assets under management, will drop the BNY Mellon BRIC Select ADR Index in favor of the BNY Mellon BRIC Select DR Index.
EEB is currently more “BIC” than BRIC as the fund is noticeably light on Russia exposure. Russia, the “R” in BRIC and the world’s largest oil producer, accounts for just 2.32% of EEB’s weight. By comparison, China is 23.8% of the ETF’s weight while Brazil dominates at almost 46.1%. [BRIC ETFs Get Hit With Outflows]
EEB will also, for the first time, be able to own Hong Kong-listed China H-Shares, reports Hung Tran for Index Universe. As EEB increases its Russia exposure with the index change, the fund’s allocations to Brazil and China could be reduced while its weight to the energy sector, already the ETF’s largest at 23.3%, could increase.
Despite the calamity facing emerging markets equities in recent weeks, EEB has managed to notch a small gain over the past month.
Among popular, diversified emerging markets ETFs, the WisdomTree Emerging Markets Equity Income Fund (DEM) has one of the largest weights to Russia at 19.2%. That makes Russia DEM’s largest country weight and that leads to energy being the ETF’s second-largest sector exposure at 21.2% behind financial services. [BRIC ETFs Still Face Hurdles]
The EGShares Beyond BRICs ETF (BBRC) will also get a new index, Index Universe reported. BBRC will drop the Indxx Beyond BRICs Index in favor of the FTSE Beyond BRICs Index, another sign of FTSE’s growing reach in North American ETFs. Earlier this month, the index provider said there are now more than 100 ETFs listed in North America that are tied to its benchmarks. [FTSE Hits Century Mark for North American ETFs]
The FTSE Beyond BRICs Index will allow BBRC to expand its lineup to as many as 75 stocks from 50 along with allowing for the inclusion of frontier markets. South Africa, Mexico, Malaysia, Thailand and Indonesia are BBRC’s top-five country exposures. That group represents about 81% of the fund’s weight. Year-to-date, BBRC has fallen 14.9%.
Guggenheim BRIC ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DEM and EEB.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
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