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EGShares Could Self-Index Its ETFs


Emerging Global Advisors, the New York-based ETF sponsor that focuses exclusively on emerging markets funds, has filed plans with the Securities and Exchange Commission to self-index its ETFs. EGShares, whose popular funds include the EGShares Emerging Markets Consumer ETF (ECON) , could join an increasing number of ETF sponsors that have already made the move to or are considering self-indexing.

Some ETF firms are deciding to manage their own indices rather than pay benchmark licensing fees to third-party providers. Van Eck’s Market Vectors and WisdomTree (WETF) are among the firms that already run ETFs based on their own benchmarks. Other ETF firms that have filed to self-index in the past year are Northern Trust’s (NTRS) ETF arm FlexShares and Guggenheim Partners. [Self-Indexing Trend Raises Conflict of Interest Concerns for ETFs]

Market Vectors has used its own indices for some of its emerging markets and sector funds. WisdomTree uses its own indices for ETFs that weight stocks by fundamental factors, rather than by market capitalization like most traditional equity benchmarks. For example, WisdomTree maintains indices that weight companies by dividends and earnings that form the basis of its ETFs. [More ETF Firms Join Self-Indexing Trend]

The news of EGShares considering its own move to self-indexing comes just days after the firm said it will switch the index for its EGShares Beyond BRICs ETF (BBRC) to the FTSE Beyond BRICs Index from the Indxx Beyond BRICs Index. [Guggenheim BRIC ETF to get More BRIC Feel]

FTSE is the index provider for the EGShares EM Dividend High Income ETF (EMHD) and the EGShares Emerging Markets Dividend Growth (EMDG) , the firm’s most recent new products. EGShares ETFs are also benchmarked to Dow Jones and Indxx indices.

In addition to equity-based ETFs, the EGShares SEC filing also details the firm’s plans to possibly self-index long/short, 130/30 and bond funds.

EGShares Emerging Markets Consumer 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. 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.