ETFs, Investments

BetaShares, Legg Mason unveil emerging market ETF

BetaShares and Legg Mason have launched an active exchange-traded fund (ETF) that will provide investors with access to emerging market equities.

This is the fourth active ETF released by BetaShares and Legg Mason since 2018, at which time they formed a partnership, and they have since launched three equity income strategies.

The new BetaShares Legg Mason Emerging Markets Fund will be managed by Legg Mason affiliate Martin Currie, which oversees an unlisted Australian managed fund version of the emerging markets strategy.

Legg Mason Australia and New Zealand managing director Andy Sowerby said: “Emerging markets, which now dominate world economic production, also lead future global economic expansion. The International Monetary Fund predicts these economies will achieve average GDP (gross domestic product) growth of almost 5 per cent per annum over the medium term, a result that advanced economies will not match.

“This faster growth in emerging markets is underpinned by strong secular trends, such as a fast-growing middle class, urbanisation, digitisation and social reform. These economies are also at the forefront of the global technology revolution, with many emerging market tech companies among the most innovative and fastest growing in the world.”

Commenting on the launch of the fund, BetaShares chief executive Alex Vynokur said: “Australian investors are continuing to seek new opportunities to diversify the equities allocation of their portfolios beyond the highly concentrated domestic share market.”

In the past six months, there have been six ETF products released in the Australian market from Vanguard, ETF Securities, BetaShares, eInvest and State Street Global Advisors, offering investment in local and overseas markets.

Last month, BetaShares launched an India Quality ETF to give investors access to a diversified portfolio of high-quality Indian companies, while in April, ETF Securities unveiled an ETF that invests in stocks listed on the National Stock Exchange of India.

According to the “BetaShares Global ETF Review”, the global ETF industry ended the first quarter of 2019 at a record high of US$5.4 trillion in assets under management, posting a growth rate of 12 per cent for the quarter.

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