iShares to convert frontier markets ETF to active management

iShares will convert its $707mn MSCI Frontier and Select EM ETF to active management, a filing shows.

Under the switch, scheduled for June 1, the fund will continue to be managed by BlackRock Fund Advisors, but will drop its peg to the MSCI Frontier and Emerging Markets Select Index, according to a regulatory filing.

The fund will consequently drop “MSCI” from its name.

The change will “allow greater flexibility and liquidity in various market conditions”, iShares said in a note to investors.

Once it is actively managed the ETF will be free to respond to factors including regulatory requirements, market limitations and repatriation restrictions, and will be able to vary its exposure to cash and cash equivalents, the note says.

Over the past year the fund is down more than 19 per cent, according to Morningstar, and over 10 years it has eked out a 2.2 per cent gain.

The fund, which debuted in 2012, recorded $341mn in net inflows over the year ended March, Morningstar data show.

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