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State Street Could List Beyond BRICs ETF


The Vanguard FTSE Emerging Markets ETF (VWO) and the iShares MSCI Emerging Markets ETF (EEM) are not just the two largest emerging markets ETFs, they are two of the seven largest U.S.-listed ETFs of any kind.

Despite the recent declines experienced by emerging markets equities, VWO and EEM still have over $83.8 billion in combined assets under management. The size of these funds is not only a testament to the previous popularity of emerging markets investing, but how hard it can be for rival issuers to gain traction with competing products. [Vanguard ETFs Bring in $40B After Index Changes]

State Street’s (STT) State Street Global Advisors Unit, the second-largest U.S. ETF sponsor, could bring some new competition to the emerging markets ETF arena. The company has filed plans with the Securities and Exchange Commission to possibly introduce the the SPDR MSCI Beyond BRIC ETF.

The ETF would invest in developing-market stocks in Chile, Columbia, the Czech Republic, Indonesia, South Africa and Turkey, among others, reports Christopher Condon for Bloomberg.

“Beyond BRIC” investing has grown slightly as a theme for new emerging markets ETFs. The BRIC nations – Brazil, Russia, India and China – typically account for significant percentages popular diversified emerging markets ETFs such as VWO and EEM. For example, the BRIC quartet currently combine for about 42% of EEM’s weight. China alone is almost 19.3% of EEM’s weight.

State Street brings its beyond BRIC ETF to market it would compete directly with the EGShares Beyond BRICs ETF (BBRC) . BBRC a year ago and, as its name implies, offers no exposure to the BRIC nations. [EGShares Launches Two New Emerging Markets ETFs]

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%.

EGShares Beyond BRICs ETF

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM.

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.