Emerging Global Advisors has now completed the two-year rollout of its Global Emerging Markets Sector (“GEMS”) ETF suite. The effort began with the May 2009 introduction of an emerging markets energy ETF, then two months later a sector composite ETF encompassing all 10 underlying sectors was unveiled. The emerging markets financial sector ETF followed in September 2009. Last Thursday (6/23/11), the final eight members of the GEMS suite came out. The three originals received new GEMS-brand names and ticker symbols.
GEMS ETFs provide emerging markets sector exposure similar to sector suites targeting U.S. and other developed markets. All are based on the Dow Jones Emerging Markets Sector Titans Indexes. The underlying indexes include the leading emerging market companies in each of the 10 broad industries (sectors) as defined by the Industry Classification Benchmark (ICB). Each index is constructed from the 30 largest stocks in its sector by capitalization weighting, with a 10% cap for any given stock. The classification system currently has South Korea and Taiwan listed as developed markets; companies from those countries are excluded from the GEMS suite.
As a huge fan of sector investing, I would like to see GEMS succeed. They could be very useful tools. Unfortunately, non-domestic sector funds have had a very low success rate so far. Most of the WisdomTree International Sector funds closed and liquidated, all ten members of the iShares MSCI ex-US Sector suite are on ETF Deathwatch, and the SPDR International Sector ETFs are struggling to gain traction with investors. For whatever reasons, few ETF investors seem interested in foreign sectors. Multiple sponsors (including heavyweights like iShares and SPDR) have the same problems. Perhaps GEMS will be the exception to the rule.
EGShares overhauled its website to include a specific landing page for GEMS. All members of the GEMS sector solution suite have expense ratios capped at 0.85%. The fact sheet links provided below include all 30 holdings, country breakdowns, subsector weightings, market cap data, trailing P/E, and Price/Book ratio:
- EGShares GEMS Composite ETF (AGEM, former ticker = EEG) fact sheet (pdf)
- EGShares Basic Materials GEMS ETF (LGEM) fact sheet (pdf)
- EGShares Consumer Goods GEMS ETF (GGEM) fact sheet (pdf)
- EGShares Consumer Services GEMS ETF (VGEM) fact sheet (pdf)
- EGShares Energy GEMS ETF (OGEM, former ticker = EEO) fact sheet (pdf)
- EGShares Financials GEMS ETF (FGEM, former ticker = EFN) fact sheet (pdf)
- EGShares Health Care GEMS ETF (HGEM) fact sheet (pdf)
- EGShares Industrials GEMS ETF (IGEM) fact sheet (pdf)
- EGShares Technology GEMS ETF (QGEM) fact sheet (pdf)
- EGShares Telecom GEMS ETF (TGEM) fact sheet (pdf)
- EGShares Utilities GEMS ETF (UGEM) fact sheet (pdf)
Two related funds that (so far) are not included in the GEMS lineup:
- EGShares DJ Emerging Markets Metals & Mining Titans Fund (EMT), launched May 2009, is not one of the ten major ICB industry classifications. It represents a subset of EGShares Basic Materials GEMS ETF (LGEM).
- EGShares DJ Emerging Markets Consumer Titans Index Fund (ECON), launched September 2010, is a superset of the two consumer classifications.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.