As the political landscape and high stock valuations in the U.S. lead investors to seek new international markets to invest in, MFS Investment Management has launched a new emerging markets ETF that is actively managed.

The asset management company on Wednesday launched the MFS Blended Research Emerging Markets Equity ETF (NYSE:BREE), which is the latest entrant in the growing space of active ETFs. The new ETF is the sister fund of the MFS Blended Research International Equity ETF (NYSE:BRIE), which primarily invests in developed markets.

The new ETF seeks to outperform the MSCI Emerging Markets Index by using a combination of quantitative screening and conventional fundamental research, also known as “blended research.”

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A Hybrid Research Approach

Quantitative models assist in the analysis of large amounts of data to find new opportunities through factors such as stock valuation or stock momentum. However, the screening of stocks may not consider factors such as the quality of management of companies, which is where fundamental analysis is likely to score higher.

Under normal conditions, the fund will invest at least 80% of its assets in equities tied to emerging markets across Asia, Latin America, Africa, the Middle East and Eastern Europe. Unlike passive funds, its managers can adjust sector exposure, market-cap allocations, and risk levels when constructing the portfolio.

Timing The Emerging Markets Rebound

The ETF launch comes as global investors seek to reassess their exposure to the U.S. stock market.

Investors’ worries over the high valuations of the U.S’.s biggest technology companies, as well as the growing trend of “de-dollarization,” have led to a move toward other markets. The past 12 months have seen the MSCI Emerging Markets Index outperform both the S&P 500 and the MSCI World Index.

Active ETFs have also been one of the fastest-growing segments of the market, as asset managers seek to utilize the structure to launch “beating the market” strategies.

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