Exchange-traded fund (ETF) provider Betashares has launched an investment vehicle aimed at providing Australian investors access to the MSCI Emerging Markets Index.
The Betashares MSCI Emerging Markets Complex ETF, trading under the Australian Securities Exchange (ASX) ticker BEMG, will incorporate an underlying index comprised of large and mid-cap companies across 24 emerging economies in regions including Asia, Latin America, Eastern Europe and Africa. It will offer exposure to over 1200 companies.
“BEMG will offer Australian investors and their financial advisers exposure to some of the fastest-growing economies in the world and can help diversify portfolios beyond developed markets like the US and Europe,” Betashares chief executive Alex Vynokur explained.
“Despite their growth, emerging markets exposures remain difficult to access directly. BEMG will bridge this gap within a convenient, cost-effective and familiar ETF structure. To that end, we’re proud to expand our line-up of global equities investment solutions to assist investors and their financial advisers in building more robust portfolios.”
The Betashares MSCI Emerging Markets Complex ETF has an annual management fee of 0.35 per cent, which the manager claims will make it the most cost-effective fund of its kind in Australia.
According to the ETF provider, emerging market economies have significant growth potential given the powerful demographic trends, including a rising middle class, rapid urbanisation and accelerating digital transformation, that should increasingly place them at the centre of future global economic expansion.
Emerging markets have also historically shown a low correlation with developed markets such as the US and Europe, meaning allocations to them helps reduce overall portfolio volatility.
The latest offering is the second ETF launched by the manager this month. Earlier in August, it released the Betashares S&P Australian Shares High Yield ETF (ASX: HYLD) and reduced the fee on its global equity income ETF.
Those ETFs were designed to provide retirees with a robust source of income, given interest rates are expected to fall.
