New ETF Gets Comprehensive With Emerging Markets Exposure


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Why have exposure to just one investment factor when three, four or more can be more potent? It is a question that has been pondered and answered by plenty of exchange-traded funds issuers and applied to developed and emerging markets stocks.

The latest entrant to the multi-factor emerging markets ETF competition is the Deutsche X-trackers FTSE Emerging Comprehensive Factor ETF (DBX ETF Trust (NYSE: DEMG)), which debuted Tuesday. DEMG joins Deutsche Asset Management's (Deutsche AM) growing lineup of multi-factor ETFs, which includes the Deutsche X-trackers Russell 1000 Comprehensive Factor ETF (NYSE: DEUS) and Deutsche X-trackers FTSE Developed ex US Comprehensive Factor ETF (NYSE: DEEF) launched in November 2015.

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A Little More About DEMG

DEMG follows the FTSE Emerging Comprehensive Factor Index. That benchmark emphasizes the low volatility, momentum, quality, size and value factors.

The new ETF is home to nearly 600 stocks with over 52 percent hailing from Asian countries. Africa, emerging Europe and Latin America combine for 39.1 percent of DEMG's geographic weight. All of DEMG's Africa exposure is allocated to South Africa. South Africa's, the continent's second-largest economy behind Nigeria, is DEMG's largest country weight at 16.6 percent. China, Taiwan, Brazil and Mexico round out the new ETF's top five country weights.

DEMG's sector weights also set the ETF from standard, diversified emerging markets ETFs. The new ETF's largest sector exposure is 17.9 percent to financial services followed by 13.7 percent to consumer staples names and 12.4 percent to industrial stocks.

While past performance is no guarantee of future returns, it is worth nothing that the same investment methodology DEMG will follow is paying off for investors in DEEF and DEUS.

Those ETFs “have both outperformed their market cap weighted benchmarks since launch. In Q1 2016, DEUS had a total return of 4.23 percent, which compared favorably to the 1.17 percent total return from the Russell 1000 Index, DEUS’s market cap weighted benchmark. DEEF delivered 1.04 percent over the same period, outperforming its market cap weighted FTSE Developed ex-US index by 1.38 percent. DEMG follows the same investment methodology as the two previously-launched funds applied to the emerging markets universe,” according to Deutsche AM.

DEMG charges 0.5 percent a year, or $50 per $10,000 invested.


Crypto Whales Are Loading Up — Are You?

New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.


Posted In: Long IdeasNewsNew ETFsEmerging Market ETFsTrading IdeasETFsDEMGDeutsche Asset Managementmulti-factor ETFs