IndexIQ launched the fund, ticker symbol EMER, on the NYSE Arca platform; the fund has an expense ratio of 0.75%. According to the company, EMER is the first ETF dedicated to providing access to mid-cap Emerging Markets equities, and will do so via a “pure play” approach. This means that all of the equities included in the fund’s underlying index will be listed on an exchange in a less developed market in the Americas, Europe, Asia, Africa, and the Middle East.
The fund will be diversified across both Emerging Market countries and industry sectors. As of May 31, 2011, its underlying index included exposures to Consumer Discretionary (18.69%), Financials (18.10%), Industrials (15.88%), Materials (13.28%), and Technology (9.15%).
According to IndexIQ, EMER seeks to replicate, before fees and expenses, the performance of the IQ Emerging Markets Mid Cap Index (IQMDEMG), a float-adjusted market-cap-weighted index that is intended to track the overall performance of the mid-capitalization sector of publicly traded companies domiciled and primarily listed on an exchange in the Emerging Markets. EMER is intended to provide pure-play exposure to this sector either as a stand-alone vehicle or used in combination with large- and small-cap Emerging Market offerings to create a broad-based portfolio.
“Just as it is important for investors to diversify across capitalization spectrum in their domestic portfolios, the same holds true for investors allocating to emerging markets,” said Adam Patti, CEO of IndexIQ. “This first-of-its-kind product [will] allow investors to access the growth potential of the Emerging Market mid-cap sector in a highly-liquid, highly transparent way.”