Emerging markets: An insight into the intricacies of market making ETFs

In 2010 the underlying MSCI EM index returned over 16%* and the main tracking ETFs from iShares, Lyxor and db x-trackers boosted their shares in issue by between 40%-90%. Assets under management in these three European funds topped $15bn at the end of the year and while widespread unrest in the MENA countries in Q1 2011 has driven a spate of redemptions in the funds, assets currently stand at around $13bn*. With the growing popularity of ETFs as a tool for gaining exposure to these markets, we thought it would be useful to give investors an insight into how we make markets in these pro...