U.S. Markets closed

EGShares Beyond BRICs ETF Tops $250M in AUM


Buoyed by resurgent emerging markets equities and investors’ thirst for equity exposure beyond the BRIC nations of Brazil, Russia, India and China, the EGShares Beyond BRICs ETF (BBRC) has surpassed $250 million in assets under management.

While $250 may not sound like a mammoth number in the context of other emerging markets ETFS, several of which have billions or tens of billions in assets, BBRC’s ascent should be put into proper context. The ETF is just two years old and started 2014 with just $22 million in AUM, according to a statement from EGShares.

BBRC’s “performance has also been strong, up 11.26% year-to-date as of August 5, 2014, compared to 7.74% for the MSCI Emerging Markets Index,” said the issuer.

Excluding the BRIC nations means BBRC has missed out on epic rallies in Brazilian, Indian and, more recently, Chinese shares. However, the BRIC exclusion also means the ETF has dodged controversy and weakness associated with Russian stocks. [Russia ETFs Hit by New Sanctions]

BBRC holds 92 stocks hailing from emerging and frontier markets. In October 2013, BBRC completed its transition to the FTSE Beyond BRICs Index, which allowed the fund to allocate up to 25% of its weight to frontier markets firms. [Beyond BRICs ETF Gets a New Index]

““In our view, smaller or less mature emerging and frontier markets represent important growth within emerging markets, and they have offered stronger growth and diversification characteristics than mainstream emerging market indices today,” said Marten Hoekstra, CEO of Emerging Global Advisors, in the statement. “The inflows BBRC has seen this year demonstrate developing investor interest in targeting smaller, less mature economies.”

At the end of the second quarter, four countries commanded double-digit weights in BBRC. Those countries, Mexico, South Africa, Malaysia and Qatar, combined for almost 53% of the ETF’s weight, according to issuer data.

BBRC’s largest sector allocations are 36% to financial services, 18.2% to telecom and almost 10.9% to consumer services names. The FTSE Beyond BRICs Index had a dividend yield of 3.34% as of June 30, according to EGShares data. BBRC is the second-largest EGShares ETF behind the EGShares Emerging Markets Consumer ETF (NYSEArca: ECON ).

EGShares Beyond BRICs ETF


ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.