NEW YORK--(BUSINESS WIRE)--Emerging Global Advisors (EGA), the investment advisor to the EGShares suite of emerging markets (EM) exchange-traded funds (ETF), today announced changes to its suite of income-oriented ETFs. Effective January 26, 2015, the EGShares Low Volatility Emerging Markets Dividend ETF (Ticker: HILO) will begin tracking the self-indexed EGAI Emerging Markets Quality Dividend Index and will be renamed the EGShares EM Quality Dividend ETF. The fund’s ticker will remain unchanged.
The EGShares EM Quality Dividend ETF incorporates a rules-based strategy designed to provide investors with a core emerging market equity solution that focuses on total return through higher income. It tests for such fundamental factors as return-on-equity, positive earnings growth and three-year dividend consistency.
“We have learned a great deal about investor preferences for equity income and concluded that while higher yields were attractive, dividend quality and consistency are at least as important,” said Robert Holderith, President and Founder of EGA. "To that end, HILO's new investment strategy seeks to do exactly that.”
"Dividends play an important role in EM investing,” said Nicholas Smithie, Chief Investment Strategist at EGA. “Nearly 40% of total return in emerging markets has come from dividends over the last 27 years, and this income is an important source of growth and stability for the long-term investor.1 By considering such factors as corporate earnings growth and return on equity, we bring a sharper focus to the sustainability of those dividends and the potential for total return."
In line with the firm’s efforts to periodically streamline its offering, EGA also announced that the Board of Trustees of the EGA Emerging Global Shares Trust has authorized the liquidation of two smaller dividend-related ETFs, the EGShares Emerging Markets Dividend Growth ETF (Ticker: EMDG) and the EGShares EM Dividend High Income ETF (Ticker: EMHD). Collectively, these funds represent less than 1% of total assets under management. 2 Trading on the NYSE Arca for the shares of these two Funds will be suspended prior to the open of business on Friday, December 26, 2014.
Shareholders may sell their holdings on or before Wednesday, December 24, 2014 and may incur customary brokerage charges. Shareholders who do not sell their holdings on or before Wednesday, December 24, 2014 will receive cash equal to the amount of the net asset value of their shares. The liquidating distributions are expected to be paid on or about December 31, 2014. The Advisor will bear all legal and administrative expenses associated with these Fund closures.
Please see the Supplement dated November 24, 2014 to the Prospectus dated July 29, 2014 for each of the Funds listed above for important disclosures regarding the closures. For more information about the liquidation and termination process, please contact EGA at +1 888 800 4347.
About Emerging Global Advisors (EGA)
Emerging Global Advisors (EGA) is an emerging markets asset manager that employs a disciplined, rules-based investment process rooted in research and portfolio strategy. Our investment strategies, including our EGShares suite of ETFs, are designed to generate alpha in emerging and frontier markets through investment insight, a rules-based investment process and implementation experience. We offer core equity, thematic and equity income emerging and frontier market exposures. For more information, please visit emergingglobaladvisors.com.
Investors should carefully consider the investment objectives, risks, charges and expenses of a Fund before investing. To obtain a prospectus containing this and other important information, please call (888) 800-4347 or visit www.egshares.com to view or download a prospectus online. Read the prospectus carefully before investing.
Effective February 3, 2014, the investment objective for the EGShares Low Volatility Emerging Markets Dividend ETF was revised as follows: "The Fund seeks investment results that correspond (before fees and expenses) to the price and yield performance of the FTSE Emerging All Cap ex Taiwan Low Volatility Dividend Index." Please review the prospectus for details.
Emerging market investments involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, from economic or political instability in other nations or increased volatility, and lower trading volume. The value of an investment denominated in a foreign currency could change significantly as foreign currencies strengthen or weaken relative to the U.S. dollar. These funds will concentrate their investments in issuers of one or more particular industries to the same extent that its Underlying Index is so concentrated and to the extent permitted by applicable regulatory guidance. Concentration risk results from maintaining exposure to issuers conducting business in a specific industry. In certain circumstances, the Fund might not be able to dispose of certain holdings quickly or at prices that represent true market value preventing them from tracking the underlying index. As an ETF, fund shares are not individually redeemable securities. There is no assurance that an active trading market for fund shares will develop or be maintained. Small cap and mid cap companies generally will have greater volatility in price than the stocks of large companies due to limited product lines or resources or a dependency upon a particular market niche.
EGAI Emerging Markets Quality Dividend Index is designed to represent a portfolio of approximately 50 companies in developing markets that each has a higher dividend yield than the average dividend yield in the EGAI Developing Markets Universe.
Return on Equity (ROE) is the amount of net income earned as a percentage of shareholders equity.
The content of this document is presented for general information purposes only. Nothing contained herein should be considered a recommendation or advice to purchase or sell any security. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and it should not be relied on as such or be the basis for an investment decision. The statements and opinions expressed are those of Emerging Global Advisors, LLC and are as of the date of this document. All information is historical and not indicative of future results, and subject to change. This document may include estimates, projections and other “forward-looking statements. Due to numerous factors, actual events may differ substantially from those presented. Emerging Global Advisors, LLC assumes no duty to update any such statements. Past performance is no guarantee of future results.
Neither EGA Indices (EGAI), a separate group within EGA, nor any of its affiliates and their independent service providers makes any warranties or representations, express or implied, to the user with respect to any of the data contained herein. The data is provided for informational purposes only, and EGA and its affiliates shall not be responsible or liable for the accuracy, usefulness or availability of any information transmitted or made available through it. EGA Indices are protected through various intellectual property rights and unfair competition and misappropriation laws. A license is required to launch any product whose performance is linked to the value of a particular EGAISM index and for use of the EGAISM name or the name of an EGAISM index in the marketing of the product. No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of EGAI or EGA. Distribution of EGAI data and the use of EGA Indices to create financial products requires a license with EGAI and/or its licensors.
ETF shares are not individually redeemed and owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Units only, typically consisting of aggregations of 50,000 shares.
Robert Holderith and Nicholas Smithie are registered representatives of ALPS Distributors, Inc. EGShares Funds are distributed by ALPS Distributors, Inc. Emerging Global Advisors acts as the investment advisor to the EGShares Funds. ALPS and Emerging Global Advisors are unaffiliated entities.
© Copyright 2014 Emerging Global Advisors, LLC - All Rights Reserved. EGASM, EGSharesSM and EGAISM are service marks of Emerging Global Advisors, LLC. All other trademarks, service marks or registered trademarks are the property of their respective owners.
EGS002147 | Expires 12/31/2015
1 EGA Investment Strategy Commentary, “The Power of
2 As of November 20, 2014.