Emerging Global Advisors [see profile] just launched its eighth ETF. On Thursday the New York-based mutual fund firm released the EGShares Emering Markets High Income/Low Beta ETF (HILO) on the NYSE [see prospectus].
The new ETF tracks the Indxx EM High Income/Low Beta Index, which includes "higher income, lower beta stocks" than the MSCI Emerging Markets Index.
"HILO seeks to enable dividend stock buyers who want less volatility than the broad emerging markets indices to get exposure that is more likely to fit their objectives," stated Robert Holderith, founder and president of EGA.
EGA charges 85 basis points for the new ETF. ALPS serves as the advisor and distributor to the fund, while EGA is the sub-advisor and Richard Kang is PM. Bank of New York Mellon handles accounting, administration, custody and transfer agency. Stradley Ronon Stevens & Young provides legal counsel and BBD serves as the independent accounting firm.
Company Press Release
NEW YORK, August 4, 2011 – Emerging Global Advisors, an asset management company focused exclusively on emerging markets and the sub-advisor to the EGShares family of exchange-traded funds (ETFs), announced today the successful launch of HILO, an emerging markets fund designed to be significantly less volatile than funds based on the broad-based MSCI Emerging Markets Indexi. The ETF trades on NYSE Arca under the ticker symbol HILO.
HILO is designed to replicate the INDXX Emerging Market High Income Low Beta Index, which has a yield of 4.99 percentii. The 30-stock index was created from a universe of more than 2,500 companies from 21 countries that are screened for market capitalization, average daily trading value, dividend yield, consistency of dividend payments, and both beta and correlation to local benchmarksiii. HILO is passively managed and doesn’t use options, swaps, or other derivatives in its portfolio. The underlying INDXX is rebalanced annually in September.
“Investors are increasingly using emerging markets to execute portfolio strategies that they also use in developed countries,” said Robert C. Holderith, EGA’s founder and president. “HILO seeks to enable dividend stock buyers who want less volatility than the broad emerging markets indices to get exposure that is more likely to fit their objectives.”
HILO has 11 country exposures. Approximately 32 percent are in diversified telecommunication services and wireless telecommunications services. The remaining companies operate in a wide spectrum of sectors, ranging from oil, gas, and consumable fuels to communications equipment and food products.
For more information on HILO, please visit www.egshares.com/hilo.
About Emerging Global Advisors
Based in New York City, Emerging Global Advisors LLC is an independent investment advisory firm and the sub-advisor to the EGShares and GEMS family of exchange-traded funds (ETFs). The EGShares and GEMS product offerings are designed to provide investment exposures that allow more accurate targeting of important emerging market opportunities. More information on the firm and its investment products can be found at www.egshares.com and www.gemsetfs.com. The Emerging Global Shares Exchange- Traded Funds and GEMS are distributed by ALPS Distributors, Inc.
*Index returns do not represent actual ETF performance and are for illustration purposes only. Index performance does not reflect charges and expenses associated with the fund or brokerage commissions associated with buying and selling exchange traded funds. Past performance is no guarantee of future results. The fund is new and therefore does not have a performance history of its own. Portfolio yield can change as fund prices change. Companies can discontinue, lower or raise future dividend payouts. You cannot invest directly in an index.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. To obtain a prospectus containing this and other important information, please call (888) 800-4EGS (4347) or visit www.egshares.com to view or download a prospectus online. Read the prospectus carefully before you invest.
Emerging market investments involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, from economic or political instability in other nations or increased volatility and lower trading volume. Brokerage fees do apply.
Distributed by ALPS Distributors, Inc.
i An index created by Morgan Stanley Capital International (MSCI) that is designed to measure equity market performance in global emerging markets. ii Index yield refers to a one-year trailing dividend yield, which shows a company's actual dividend payments relative to its share price over the previous 12 months.
iii Beta is measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Correlation is a statistical measure of how two securities move in relation to each other.
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