With ASX exchange-traded funds (ETFs) continuing to enjoy what seems like an endless growth streak, it has become fairly common to see new funds launch on the ASX every few months.
Last Friday, the ASX welcomed its newest ETF.
It is a fund from popular provider BetaShares, and is known as the BetaShares MSCI Emerging Markets Complex ETF (ASX: BEMG).
As its name implies, this fund is an index fund and will track the performance of the MSCI Emerging Markets Net Total Return Index. This index covers both large and mid-cap stocks from 24 different emerging economies around the world.
Emerging markets are a popular asset class for ASX investors to invest in. They offer significant diversification benefits for investors who are overly concentrated in either the Australian or the US stock markets, or both. This diversification comes from not only different geographies but also different economic industries, demographics, and currencies. As the provider also notes, emerging markets have "historically shown a lower correlation with developed markets such as the US and Europe".
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BetaShares launches new emerging markets ASX ETF
The emerging markets covered in the Betashares Emerging Markets ETF are dominated by China, which currently commands just under 30% of BEMG's portfolio. Other countries offering significant contributions to this ETF's portfolio include Taiwan (19.4%), India (16.9%), and South Korea (11%). As well as Brazil (4%), Saudi Arabia (3.4%), Mexico (2%), and the United Arab Emirates (1.7%).
You might recognise some of the stocks that have the highest presence in the Betashares Emerging Markets ETF, too. They include Taiwan Semiconductor Manufacturing Co, Tencent Holdings, Alibaba Group, and Samsung Electronics Co. Aside from these names, this new ASX ETF will house around 1,200 other emerging markets stocks.
The BEMG ETF will join a few other ASX funds that already offer investors access to emerging markets, in varying degrees. These include the Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE), the iShares MSCI Emerging Markets ETF (ASX: IEM), and the VanEck MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT).
So, what else is there to know about this new fund?
Well, the index that it tracks has, as of 31 July, returned an average of 13.5% per annum over the past three years, and 7.7% over the past five.
The fund will also charge investors a management fee of 0.35% per annum. According to Betashares, there is currently "no intention" to offer dividend distributions. However, that is arguably likely to be a regulatory quirk, and change with time.
Let's see how this ETF's first few weeks and months go on the ASX.
