IndexIQ has released an ETF tracking the small capitalisation sector of publicly traded companies in South Korea, on NYSE Arca.
The IQ South Korea Small Cap ETF replicates the respective index, which comprises small capitalised, publicly traded companies that are domiciled and primarily listed on an exchange in South Korea.
The issuer says the fund is designed to provide extra alpha exposure, as a satellite holding built around a core equity portfolio.
IndexIQ chief executive officer Adam Patti says investors targeting South Korea have typically been required to invest in funds that have broad exposure to large cap and global companies in this country.
However, he says the South Korean economy has its own dynamics, which are best exploited through small capitalisation companies.
He adds: "The growth of South Korea's economy has been driven by a robust domestic consumer class, coupled with an export driven trade platform, a high growth technology sector and the unique status as one of the world's most innovative countries."
The issuer says South Korea is among the world's largest ship builders, auto manufacturers and oil product exporters. It is also dubbed to have one of the world's largest auto assembly plants, shipyards and oil refineries.
In terms of growth prospects, IndexIQ believes smaller companies in South Korea are best positioned for the greatest growth this year and beyond.
The companies constituting the underlying index must have a minimum average market capitalisation of $150m for the prior 90 day period, while stocks are required to have a minimum average daily trading volume of at least one million dollars, for the prior 90 days.
The latest fund joins the issuer's small cap range, including Canadian and Australian small cap ETFs.
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