Betashares launches low-cost EM ETF

Betashares has launched a complex ETF focused on emerging market equities, helping advisers and investors to diversify beyond domestic and US exposure. 

The ETF, which launched on the ASX on 25 August, provides investors with cost-effective access to 24 emerging markets economies with a management fee of 0.35 per cent per annum. 

Named the Betashares MSCI Emerging Markets Complex ETF (BEMG), it will offer exposure to over 1,200 companies across key sectors such as technology, financials, consumer goods, and resources which can be difficult to access directly.

“Often overlooked, emerging markets have been outpacing developed markets over recent decades, with strengthening structural fundamentals, relatively cheap valuations, and strong growth prospects. As a result, emerging markets can complement allocations to developed markets like the US, Europe or Australia for those investors seeking growth and portfolio diversification benefits,” it said.

“As a result, investors and their financial advisers can leverage BEMG to participate in the long-term growth potential of developing markets in a convenient and cost-effective structure.”

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Betashares chief executive Alex Vynokur said: “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. 

“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.”

In July, some $2.8 billion went into international equity ETFs, although none of the top 10 largest inflows went into emerging market equity ETFs. Instead, $1.5 billion of the total went into those investing in the developed world and $461 million went into US equities. 

Earlier this month, the ETF provider announced the formation of Betashares Private Capital which is aimed at offering institutional-grade private market solutions to Australian wholesale investors and advisers. 

The formation of the private credit arm comes off the back of increased demand from investors and advisers alike due to its potential to complement diversified portfolios of equities and bonds, while offering compelling risk-adjusted returns.