iShares launches new emerging markets infrastructure ETF

The launch occurs at a time when ETF net flows have been dominated by emerging markets ETFs. In May, emerging market ETFs' net flows captured approximately $6bn of the total $14.9bn in ETF net flows .

"Infrastructure is a rapidly growing investment theme that investors want to access. Global infrastructure spending is estimated to be $35 trillion in the next two decades due to a particular strain and need for infrastructure investment in the emerging economies. Inflows of net new assets into iShares emerging markets ETFs have been strong all year, indicating a steady renewed appetite for opportunities outside of developed markets."

said Michael Latham, iShares co-CEO.

Trading volumes in the iShares emerging markets funds have also been strong with more than 16bn shares traded in 2009 (Jan-May), a 119% increase compared with the same period last year .

Latham said, "We estimate that iShares emerging market net flows came equally from institutional investors and financial advisors. Institutional investors are taking advantage tactically of market opportunities within difficult-to-access markets or strategically increasing their emerging markets allocation as they recognize that developing markets represent a significant portion of the world's market cap. Some vehicles that they previously used to access this market, such as swaps, are costly and difficult to get in and out of, so institutional investors are using ETFs more to gain liquidity and trading flexibility."

He continued: "Financial advisors are investing in emerging market iShares Funds to access assets that have low historical correlations with equity and fixed income to further diversify their clients' portfolios over the long term. In addition, the currency exposure between the U.S. and emerging markets provides an additional layer of diversification benefits."

"Strong inflows into emerging markets iShares ETFs versus emerging markets mutual funds seems to be evidence that investors are demanding highly liquid investment products that are transparent in costs, holdings and product structure. We expect that these will continue to be strong themes in 2009."

This most recent offering of iShares in the US complements its pre-existing iShares S&P Emerging Market Infrastructure fund domiciled in Dublin, Ireland. The fund is traded on the London Stock Exchange with the ticker IEMI (LSE: IEMI), providing another option to investors depending on their investment needs.