AROUND THE WORLD OF ETFs

April 23, 2012

SPY Crosses $100 Billion Mark
In early February, “SPY,” the very first U.S.-listed exchange-traded fund, became the first ETF to gather more than $100 billion, almost 19 years after its launch, putting it in the company of some of the more legendary U.S. mutual funds and making it the perfect metaphor for an ETF industry that’s on a roll.

The fund, officially known as the SPDR S&P 500 ETF (NYSE Arca: SPY), gathered $1.31 billion in fresh assets as of Jan. 20, ending the day’s trading session with $101.03 billion in assets, according to data compiled by IndexUniverse. It’s a milestone that’s almost unbelievable to those who created SPY. The ETF was dreamed up by the American Stock Exchange as a vehicle for traders its creators hoped would help pump up volume.

When it crossed the threshold, SPY was just about as big as the $101.8 billion Vanguard 500 Index Fund (VFINX), the world’s first index mutual fund, launched in 1975.

Van Eck Debuts Indonesia Small-Cap ETF
Van Eck Global on March 21 rolled out the market’s first equities ETF to invest solely in Indonesia’s smallest companies, providing a new way to access Southeast Asia’s biggest economy.

The Market Vectors Indonesia Small Cap ETF (NYSE Arca: IDXJ) is essentially the small-cap version of the Market Vectors Indonesia ETF (NYSE Arca: IDX), which is a large-cap portfolio that has gathered $527.4 million since it came to market in January 2009. The new fund, IDXJ, has a net expense ratio of 0.61 percent, which is capped until May 1, 2013. It’s just 1 basis point above IDX’s 0.60 percent fee.

IDXJ tracks a rules-based, modified market-capitalization-weighted, float-adjusted Market Vectors index that focuses on small-cap companies either headquartered in or that generate most of their revenues in Indonesia. The index includes 27 securities.

iShares Rolls Out Commodity-Stock ETFs
In early February, iShares launched five separate equities focused on commodities.

The five funds and their expense ratios are:

  • iShares MSCI Global Gold Miners Fund (NYSE Arca: RING), 0.39 percent
  • iShares MSCI Global Select Metals & Mining Producers Fund (NYSE Arca: PICK), 0.39 percent, including fee waiver of 0.02 percent through Dec. 31, 2014
  • iShares MSCI Global Energy Producers Fund (NYSE Arca: FILL), 0.39 percent
  • iShares MSCI Global Agricultural Producers Fund (NYSE Arca: VEGI), 0.39 percent, including 0.01 percent fee waiver through Dec. 31, 2014
  • iShares MSCI Global Silver Miners Fund (NYSE Arca: SLVP), 0.39 percent

All five new iShares funds use representative sampling strategies, meaning they don’t seek to own all the companies in the MSCI indexes they track. They also are broad-based funds that provide diversification by including stocks in a wide variety of regions and countries, both developed and developing.

WisdomTree First To Market With EM Corporates Fund
WisdomTree debuted the market’s first broad-based emerging market corporate bond ETF in early March, beating iShares and State Street Global Advisors to the punch.

The WisdomTree Emerging Markets Corporate Bond Fund (Nasdaq GM: EMCB) is an actively managed port-folio consisting of dollar-denominated investment-grade corporate bonds from issuers in Asia, Latin America, Eastern Europe, Africa and the Middle East. The fund, which is listed on the Nasdaq exchange, has an annual expense ratio of 0.60 percent.

EMCB’s portfolio consists of bonds between two to 10 years, according to the company. The fund’s holdings currently have nearly eight years’ average maturity. Legg Mason’s subsidiary Western Asset Management is EMCB’s manager.

EMCB will eventually go head-to-head with similar strategies from iShares and SSgA, but those funds, which are passively managed, are still sitting in the Securities and Exchange Commission’s pipeline.

The ETF was seeded with almost $45 million, according to information posted on WisdomTree’s website.

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