Today Barclays Global Investors' iShares family launched eight international exchange-traded funds on two different exchanges.
The launch can be divided into three buckets: international small cap, real estate, and emerging markets.
iShares FTSE Developed Small Cap ex-North America Index Fund (IFSM)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund (IFGL)
iShares FTSE EPRA/NAREIT Asia Index Fund (IFAS)
iShares FTSE EPRA/NAREIT Europe Index Fund (IFEU)
iShares FTSE EPRA/NAREIT North America Index Fund (IFNA).
iShares S&P Asia 50 Index Fund (AIA)
iShares MSCI BRIC Index Fund (BKF)
iShares MSCI Chile Index Fund (ECH).
SURGEON GENERAL'S WARNING: Any overconfidence in your investing ability, willingness and need to take risk may be hazardous to your health.
The proliferation of ETF index tracking funds (and more) is giving me a severe case of MEGO (My Eyes Glaze Over). The investment industry is going wild on EFTs not unlike a 4-year old turned lose in a candy store. :lol:
Chas
Chas |
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The course of true love never did run smooth. Shakespeare
It certainly is interesting to note why iShares is charging 0.50% for this FTSE international smallcap fund and why they will be charging only 0.40% for the MSCI international (EAFE) smallcap fund. Maybe MSCI is offering a lower licensing fee to iShares?
SURGEON GENERAL'S WARNING: Any overconfidence in your investing ability, willingness and need to take risk may be hazardous to your health.
To end September 2007
1yr 3yr 5yr 10yr
1. WisdomTree Intl. Small Cap Dividend 29.19 28.90 32.75 17.51
2. FTSE RAFI Dev. ex US Mid-Small cap 22.88 24.85 29.27 15.18
3. FSTE Dev. Small Cap ex-North America 27.49 28.22 30.87 13.40
4. S&P/Citigroup World ex US Cap < 2bn 27.07 26.73 29.97 12.13
5. EAFE Small Cap 19.10 23.58 27.56 9.57
6. S&P/Citigroup EMI EPAC Index 25.77 27.35 29.35 11.69
Source: State Street, Powershares, Vanguard, iShares, WisdomTree, S&P/Citigroup websites.
The first and second are self explanatory, the third is being tracked by the iShares fund just launched, the fourth is being tracked by the State Street Intl. small cap ETF, the fifth will shortly be tracked by another ishares fund, and the last one is tracked by the Vanguard Intl Explorer fund.
Robert
Edit - the 10yr annualized EAFE small cap index return was extracted from this benchmark return.
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One thing that I noticed looking through the various links, and at Morningstar, etc., is that IFSM appears to hold many more stocks whose headquarters are in Europe, and much less in Japan and other Asian countries.
Per Morningstar, the WisdomTree Int'l Small Cap Dividend ETF (ticker DLS) was holding as of 9/30/07 46.5% in Western Europe/UK, 22.2% in Japan, and 31.1% in Asia ex-Japan.
Meanwhile, the SPDR S&P Int'l Small Cap ETF (ticker GWX) was holding as of 10/31/07 37.7% in Western Europe/UK, 24.8% in Japan, and 20.8% in Asia ex-Japan
According to the iShares website, their FTSE Developed Small Cap ex-North America ETF (ticker IFSM) as of 9/30/07 was holding 71.50% in the UK/Europe, 15.85% in Japan, and 10.82% in Asia ex-Japan. The remaining 1.83% was in Greece, which may or may not be considered Western Europe (I don't think that is).
Neither DLS nor IFSM were holding anything in Canada, but GWX had 10.0% of its portfolio in Canadian stocks.
Country specifics-wise: Japan, the UK, and Australia are in the top five for all three of those ETF's.
DLS was holding 22.2% in Japan, 18.6% in the UK, and 18.1% in Australia (first, second, and third place for country weights);
GWX was holding 24.8% in Japan, 10.8% in the UK, and 9.0% in Australia (first, second, and fourth place);
IFSM was holding 15.9% in Japan, 24.1% in the UK, and 5.8% in Australia (second, first, and fifth place).
Not sure if the country data is meaningful, although I do wonder if Canada isn't a small positive for GWX.
The proliferation of ETF index tracking funds (and more) is giving me a severe case of MEGO (My Eyes Glaze Over). The investment industry is going wild on EFTs not unlike a 4-year old turned lose in a candy store.
Wait until they come out with the US Index ex Kansas and Mississippi ETF
Today Barclays Global Investors' iShares family launched eight international exchange-traded funds on two different exchanges.
The launch can be divided into three buckets: international small cap, real estate, and emerging markets.
iShares FTSE Developed Small Cap ex-North America Index Fund (IFSM)
iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund (IFGL)
iShares FTSE EPRA/NAREIT Asia Index Fund (IFAS)
iShares FTSE EPRA/NAREIT Europe Index Fund (IFEU)
iShares FTSE EPRA/NAREIT North America Index Fund (IFNA).
iShares S&P Asia 50 Index Fund (AIA)
iShares MSCI BRIC Index Fund (BKF)
iShares MSCI Chile Index Fund (ECH).
I agree that there is an overproliferation of ETFs. Only the first two are really useful, because they track market segments that many investors will want to hold. IFSM and IFGL should be great diversifiers for most US investors, but I don't see the point of regional REIT funds, and BKF looks like a fad as there is no reason to concentrate on those four countries.
The proliferation of ETF index tracking funds (and more) is giving me a severe case of MEGO (My Eyes Glaze Over). The investment industry is going wild on EFTs not unlike a 4-year old turned lose in a candy store.
Wait until they come out with the US Index ex Kansas and Mississippi ETF
Robert T wrote:Here are some of the Intl. Small cap index returns for comparion:
Naturally, the upcoming ETF that I am most interested in seems to have a drastically lower historical 10-year return than any of the other choices! That's the #5, MSCI EAFE Small Cap with a 10-year of 9.57%.
In the link provided, there is a footnote that indicates that prior to 2001, that EAFE small cap index that gives rise to the 9.57% is for price appreciation only, that is ignoring dividends. That doesn't make up the whole gap, of course.
Hmmm...that's interesting that the MSCI EAFE Smallcap Index has done so poorly over the past 10 years relative to the other indexes (as shown in the table above by Robert). I'm not sure why that is.
Obviously, the ones from WisdomTree (Dividend) and Powershares (RAFI) are value-tilted and so they had some wind behind their backs. Notice also that the WisdomTree and Powershares ETF hold slightly larger companies that the other indexes. Well it should be obvious with the one from Powershares as it's called the RAFI International Dev ex-US Small-Midcap.
It's still very early in the game but the iShares FTSE and Powershares RAFI ETF are trading at very low volumes. I'm not feeling confident that down the road the one from Powershares will have significant volume.
SURGEON GENERAL'S WARNING: Any overconfidence in your investing ability, willingness and need to take risk may be hazardous to your health.