Firm Eyes First Emerging Market Sector ETFs

Robert Holderith, ceo at Emerging Global Shares and former ProFunds' managing director of institutional sales, said his firm will launch the first emerging market sector- based exchange-traded funds in early 2009. The firm will launch 12 ETFs that track the Dow Jones Emerging Markets Titan Composite Index. "The funds will be the first of their kind to grab the 30-best companies across all emerging market countries," said Holderith. "Before now, investors had to take what sectors they like in Brazil or China and everything else wrapped in the country ETF," said Holderith.

Scott Burns, ETF strategist at Morningstar, said that the launch of the funds based on the DJ Emerging Markets Titan Composite Index was unique, but may suffer because of existing market conditions. "They are the first for sector-based ETFs in emerging markets, but the success of them will be hard to forecast. Investor appetites are the ultimate depiction of how successful these will be."

Funds include the Consumer Services Titans Index Fund, Oil and Gas Titans Index Fund, Financials Titans Index Fund, Health Care Titans Index Fund, Industrials Titans Index Fund and will have 85 basis points expenses. All funds will be passively managed.

Holderith left ProFunds in August to pursue the opportunity to launch his own firm and offer a lineup that he thought was missing within the ETF market. ProFunds' spokesman Tucker Hewes confirmed that Holderith left in August and said his position had not been filled. 

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