State Street Global Advisors, the investment management business of State Street Corporation, has launched the world's first emerging markets inflation-linked exchange traded fund.

The physically-backed ETF tracks the Barclays EM Inflation-Linked 20 per cent Capped Index, which includes inflation-linked sovereign bonds issued by Brazil, Mexico, Chile, South Africa, Poland, Turkey, Israel, South Korea and Thailand, the firm said in a statement.

The market for emerging market linkers has grown strongly over the past 10 years, with the number of issuers doubling and the number of issues increasing threefold. The total market now stands at almost $600 billion.

The fund has an expense ratio of 0.55 per cent and will be initially listed on the Deutsche Börse.

"Investors are increasingly looking for ways to diversify their emerging markets exposure beyond traditional equity allocations and are aware of prospective inflationary pressures. The fund gives investors simplified access to a diversified portfolio of local currency inflation-linked bonds for the very first time," said Scott Ebner, global head of product development for State Street.

State Street Corporation has got $25.4 trillion in assets under custody and administration and $2.2 trillion in assets under management as of 31 March 2013. State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia.