Global X Launches Value and Growth Emerging-Markets ETFs

On Jan. 25, Global X launched two emerging-markets exchange-traded funds, offering investors the first-ever style-based emerging-markets ETFs: Global X Emerging Markets Value ETF  and Global X Emerging Markets Growth ETF .

EMVX will track the Russell Emerging Markets Mega Cap Value Index, which includes about 80 mega-cap growth companies with lower price/book ratios and lower expected growth values. By far, the biggest industry weighting in the index is energy, which makes up a whopping 45%-plus of the fund's assets. After that are utilities (17%-plus of assets), materials & processing (11%), financial services (11%), and technology (7%). The largest constituents include Brazilian energy company  Petrobras (PBR) (11%), Russian natural gas extractor Gazprom (9%), South Korean conglomerate Samsung (6%), Russian oil and gas company Surgutneftegaz (6%), and Chinese telecom  China Mobile  (5%). Top country weightings are Russia (27% of assets), South Korea (25%), Brazil (20%), China (16%), and Taiwan (7%). Note that those five countries together make up a whopping 95% of the fund's assets.

Although emerging markets typically are associated with growth investments, the value index actually had outperformed the growth index over the past three years on an annualized basis.

Meanwhile, EMGX tracks the Russell Emerging Market MegaCap Growth Index, which includes about 140 mega-cap growth companies with higher price/book ratios and higher expected growth values. The growth index's industry weightings are considerably different from the value index's, with financial-services companies comprising almost one third of the index, followed by technology (18% of assets), materials & processing (17%), and energy (13%). The index's largest weightings are  Vale S.A. (VALE) (almost 7% of assets),  Taiwan Semiconductor (TSM) (4%), Samsung Electronics (4%), China Construction Bank (3%), and  America Movil S.A.B. de C.V. (AMX) (3%). The growth index's country allocations differ from the value index as well, with China making up almost 21% of assets, followed by Brazil (also almost 21%), India (12%), Taiwan (10%), South Africa (10%), and South Korea (8%). Russian firms make up a paltry 4% of the index.

Both funds charge expense ratios of 0.69%.

 

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