Emerging Markets

Blue-Blooded US Investment House Sees Emerging Market Property Potential

Eliane Chavagnon Editor Americas 1 October 2014

Blue-Blooded US Investment House Sees Emerging Market Property Potential

Guggenheim Investments, the investment management and advisory business of Guggenheim Partners, has rolled out the Guggenheim Emerging Markets Real Estate ETF.

The ETF invests primarily in publicly-traded emerging markets real estate securities, initially across Brazil, Chile, China, Egypt, Hong Kong, India, Indonesia, Malaysia, Mexico, Morocco, Philippines, Poland, Russia, South Africa, Singapore, Taiwan, Thailand and Turkey.

Guggenheim said the fund seeks investment results that generally correspond to the performance of the AlphaShares Emerging Markets Real Estate Index. EMRE is the fifth ETF in Guggenheim's product line affiliated with the index provider AlphaShares.

“Emerging markets real estate provides the potential for an attractive return stream that combines the growth potential from these regions' favorable geopolitical and demographic megatrends with an attractive yield component,” said Burton Malkiel, who leads AlphaShares. “Investments in emerging markets real estate also may offer added portfolio diversification because of the sector's low correlation to US equities and offer potential protection from inflation in a rising interest rate environment.”

Guggenheim said the emerging markets real estate sector has expanded from 2 per cent to 11 per cent of listed global real estate securities in the last 14 years.

“Trends behind that growth include urbanization, increasing consumerism from an expanding middle class, rising foreign direct investment, and the creation of investment-friendly vehicles that provide access to the local real estate industry. One billion people are expected to enter the global consuming class by 2025, boosting annual consumption in emerging markets to $30 trillion, up from $12 trillion in 2010,” the firm said.

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