WisdomTree Investments, the New York-based exchange-traded fund firm, has watched its new local-currency emerging markets debt ETF rake in more than $166 million in less than two weeks of existence, a quicker pace than any other product launch in the company’s history that reflects spiking interest in developing-world assets.

The WisdomTree Emerging Markets Local Debt Fund (NYSEArca: ELD) has gathered almost four times as many assets as the Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC) from Van Eck. EMLC has hauled in $41.4 million in the month since its launch, an impressive figure in its own right, also reflective of how excited investors are by this new ETF emerging markets product idea.

Both funds own sovereign emerging market debt denominated in the currency of whatever country the holdings are located, meaning U.S. investors have exposure to the growth of those economies plus the currency appreciation that goes along with that growth. Moreover, analysts say the dollar is in a long-term secular decline, even though recent market volatility has often favored dollar assets like Treasurys.

“This is the most successful initial launch we’ve ever had,” WisdomTree Chief Executive Officer Jonathan Steinberg said in a telephone interview. “There has been a lot of investor excitement for both products because people get access to emerging market debt in the local currency.”

Up until the arrival of EMLC and ELD, ETF investors had two choices when it came to emerging market debt: the dollar-denominated PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY) and the iShares JPMorgan USD Emerging Markets Bond Fund (NYSEArca: EMB), also a dollar-denominated portfolio.

Van Eck’s EMLC, an index fund, is the cheaper of the two ETFs, with an expense ratio of 0.49 percent. ELD, an active strategy, has an expense ratio of 0.55 percent. WisdomTree’s ELD came onto the market on Aug. 9, while Van Eck’s EMLC launched on July 22.

‘Halfway There’

Many in the ETF industry consider $100 million in assets for a fund a milestone that separates survivors from those portfolios that will probably be shut down. That means WisdomTree’s ELD has already turned the corner and Van Eck’s EMLC is well on its way to crossing that threshold.

“We’re halfway there four weeks into it, so we thought it was a pretty good start,” said Ed Lopez, marketing director at New York-based Van Eck. “If you’re a believer in the long-term story of emerging markets and emerging markets local currency in general—and you’re going to buy and hold, then EMLC’s lower expense ratio is definitely beneficial.”

WisdomTree’s Steinberg said ELD’s splashy rollout was helped by the fact that half of the firm’s assets under management are in emerging markets, meaning it can readily gauge trends on the ground.

Specifically, having a product already on the market like the WisdomTree Dreyfus Emerging Currency Fund (NYSEArca: CEW), which focuses on short-term fixed-income instruments, gave WisdomTree crucial market intelligence. Through CEW, the firm learned that investors were ready to move out on the yield curve in emerging markets and embrace the risks and rewards of a product with four to five years of duration that yields at least 6 percent, Steinberg said.

“This launch played into some strengths we had,” Steinberg said.

Paradigm Shift

Where the developed-world economies in Europe, the U.S. and Japan are grappling with aging populations and over-indebtedness, emerging market countries are growing relatively quickly, have young populations and are increasingly well managed in terms of tax and interest rate policies.

Paul Weisbruch, an ETF trader at King of Prussia, Pa.-based Street One Financial, said that while investors are favoring fixed income in general at a time of economic uncertainty—even relatively low-yielding U.S. Treasurys debt ETFs such as iShares’ Barclays 7-10 Year Treasury Bond Fund (NYSEArca: IEF)—the strong move into emerging markets may represent a sea change of investor attitudes.

“It’s almost like a paradigm shift,” Weisbruch said in a telephone interview. “There’s appetite for these types of product; they didn’t exist before.”