Horizons launches new active emerging markets ETF


    With a management fee of 0.75%, HEMC aims to provide long-term capital growth by investing in shares of issuers that are based in or have economic links with emerging markets.

    The ETF has a strong focus on stocks that Mirae Asset expects to benefit from rising consumer trends and growing individual purchasing power in emerging markets, resulting in a portfolio that is more focused than most strategies that rely on emerging market indices.

    “Most of the emerging markets exposure to the Canadian ETF market is through broad index strategies,” said Hawkins. “[W]he indexing brings some cost and liquidity benefits, emerging markets are an area where we believe an active portfolio management team can … add real value to long-term performance. “

    Traditionally, emerging market economies have been heavily focused on commodities and industrial sectors, but that has changed in the past decade. In the course of this time, many leading companies in the developing world – especially China and India – have moved into more consumer-oriented economies with large technology and service sectors.

    “Historically, Canadian investors have shied away from emerging market exposure because they already have significant exposure to raw materials and energy in Canada’s domestic equity market,” said Hawkins. “[I]Investors in emerging markets could lose much more potential for returns through important growth opportunities in technology and consumer-oriented industries that would not be easily accessible by investing in developed markets. “


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