Alibaba Among Emerging-Market Internet Stocks in New ETF

Alibaba Group Holding Ltd. and Yandex NV are among 42 developing-nation Internet stocks that traders in the U.S. will be able to invest in through a new exchange-traded fund that launched today.

The Emerging Markets Internet and E-commerce ETF, offered by Exchange Traded Concepts and listing under the ticker EMQQ, will track companies such as the largest Chinese online retailer and the owner of Russia’s biggest search engine as well as Argentina’s MercadoLibre Inc. and Naspers Ltd. of South Africa, according to a statement.

The ETF is based on an index from Big Tree Capital LLC that rose 231 percent between June 2009 and September 2014. The Vanguard FTSE Emerging Markets ETF, the biggest developing-nation fund, gained 49 percent in the same period, data compiled by Big Tree Capital show.

U.S.-based funds have struggled to include stocks such as Alibaba, which only trades in New York while being headquartered in Hangzhou, China. The new ETF will have 31 companies that are backed by U.S. venture-capital firms and 31 that trade on the New York Stock Exchange or the Nasdaq Stock Market, the statement said.

“The indexes used by the biggest emerging markets ETFs have lots of differences from the index tracked by EMQQ,” Kevin Carter, founder of Big Tree Capital, said in the release. “They hold hundreds of state-owned companies including massive banks and oil companies, while most of Internet and e-commerce companies are excluded.”

Asset managers have pulled $607 million from emerging-market focused equity ETFs in the U.S. this year, according to data compiled by Bloomberg.