Van Eck Global, a New York-based asset manager, has launched Market Vectors Latin America Small-Cap Index ETF (LATM), US-listed open-end exchange-traded fund (ETF).
LATM is designed to give investors exposure to small-cap stocks in Latin America by seeking to track the market vectors Latin America small-cap index. LATM seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Latin America Small-Cap Index, which uses a float-adjusted modified market capitalization weighting methodology.
Van Eck believes that the country weightings in LATM’s underlying index closely reflect the percentage contribution each country makes to regional GDP than competing indices for the region.
Including offshore components, seven countries are currently represented in the index, with Brazil having the largest weighting, followed by Mexico, Chile, Peru, Colombia, Argentina and Ecuador. Offshore companies are eligible for inclusion in the index, provided that they generate at least 50% of their revenues in Latin America.
Jan van Eck, principal at Van Eck Global, said: “We believe that small-cap stocks are an excellent way to gain direct exposure to the domestic economy of a country. These companies operate largely or exclusively in their home markets and are positioned to take advantage of local economic trends such as growing household wealth and increasing consumer spending.”