IndexIQ Does It Again: First To Market With Mid-Cap EM ETF

IndexIQ, the New York-based ETF issuer known primarily for its international small-cap ETFs and funds that replicate hedge fund strategies, rolled out another first-to-market fund today with the debut of the IQ Emerging Markets Mid-Cap ETF (NYSE: EMER).

While small-cap country-specific emerging markets ETFs, including some of IndexIQ's own funds, have proven popular with investors, EMER is the first fund devoted solely to emerging markets mid-caps.

IndexIQ is no stranger to global mid-caps as the firm was the first to offer a pure play ETF on Japanese mid-caps, the recently introduced IQ Japan Mid Cap ETF (NYSE: RSUN).

With an expense ratio of 0.75%, EMER will be home to 348 stocks with a weighted average market value of nearly $2.6 billion. The ETF will track the IQ Mid Cap Emerging Markets Index, a float-adjusted, cap-weighted index.

EMER features double-digit weights to four sectors: Consumer discretionary (18.69%), financials (18.1%), industrials (15.88%) and materials (13.28%).

The top-five country weights are as follows: Taiwan (22.8%), South Korea (12.97%), South Africa (11.67%), China (10.76%) and Brazil (9.35%). Malaysia, India, Mexico, Indonesia and Thailand round out the top-10 countries EMER offers exposure to. All told, EMER offers exposure to 20 emerging markets.

None of EMER's holdings are listed on U.S. exchanges.

“Just as it is important for investors to diversify across capitalization spectrum in their domestic portfolios, the same holds true for investors allocating to emerging markets,” IndexIQ CEO Adam Patti said in a statement.

EMER will be IndexIQ's fourth emerging markets ETF following plays on Hong Kong, South Korea and Taiwan and the firm's tenth ETF offering international exposure.

At the end of June, the firm had 18 ETFs with about $450 million in assets under management.