838Published on July 1, 2021
Dawn Global has recently announced the launch of the Asian Growth Cubs exchange traded fund (ETF), the first active thematic ETF to focus on public equities in emerging and frontier growth markets, including Bangladesh.
"When people read about how well the Bangladeshi economy is doing, they now will have a way to invest into the story,” said Rahat Ahmed, founding partner and CEO of Anchorless Bangladesh.
“It is great because the country can be on top of the mind when people are looking to allocate capital, and it benefits the market with increased liquidity and demand," he added.
Cubs, which is listed on the New York Stock Exchange, offers investors actively managed exposure to four other large, fast growing markets — Indonesia, Pakistan, Philippines, and Vietnam.
Including Bangladesh, these five economies have individually grown GDP faster than 6% a year in US dollars since 2000; Bangladesh and Vietnam have compounded GDP for 40 consecutive years.
Yet these markets remain inaccessible to most foreign investors due to little or no ETF coverage or American Deposit Receipt listings, Dawn Global said in a press release.
“Most emerging market investors focus in Asia on China and India, yet there is a compelling long-term secular growth story in five Asian countries with a combined population of more than 860 million people, expected to grow to 1 billion by 2035, and with attractive demographics,” said Maurits Pot, founder and CEO of Dawn Global.
The average age is 28 in these markets with a burgeoning middle class and accelerating digital adoption, he added.
Dawn Global is re-inventing the conventional approach to emerging markets equities investing by positioning Cubs as an actively managed, content driven, thematically designed, regionally diversified ETF.
“The passive, index-driven emerging market ETF asset class is concentrated on six countries — the BRICS, Korea and Taiwan — overlooking the attractive and sizable opportunity in the next generation of emerging and frontier growth markets,” Pot further said.
“The index driven market-cap weighting approach risks skewing portfolio construction to current size, not future growth potential. Instead of grouping emerging markets into a single product, we intend to give investors the option of which specific markets they have exposure to, through regionally diversified products,” he added.
Dawn Global believes active investment management is required to identify the most compelling growth companies in these nascent markets as well as to mitigate company and governance risk.
The investment process involves top-down company screening and bottom-up company analysis to identify the most compelling investment opportunities.
Cubs’ high conviction, diversified portfolio is reviewed quarterly and rebalanced twice a year, through equal weighting across all securities to mitigate single country and single company risk. The portfolio is geared towards tomorrow’s economy, with a bias towards healthcare, telecom media technology, consumer goods, and financials, the press release adds.
Exchange Traded Concepts, an ETF platform provider, is the investment adviser and Kingsway Capital Partners Limited (KCPL) is the investment sub-advisor to the fund.
Dawn Global is the sponsor to the fund and an appointed representative to KCPL. Foreside Fund Services LLC, a provider of investment management services, is the distributor of Cubs.
Dawn Global, London and Jersey, is dedicated to active thematic ETF investing in the next generation of emerging and frontier growth markets — investing today in the economies of tomorrow.
It offers institutional investors, multifamily offices, investment and financial advisors long-term geographic and growth diversification accessed via public markets.
It focuses on growing companies that are leaders, enablers, and beneficiaries of emerging and frontier market growth trends.