Daily ETF Watch: New Equal Weight Int'l Funds

December 23, 2014

A rather massive filing from Van Eck’s Market Vectors arm indicates the firm is planning to roll out a new family of ETFs in what is starting to look like the latest smart-beta trend.

The 20 funds now in registration cover individual foreign countries and entire regions; each will track an in-house equal-weighted index. Three of the funds are currency-hedged versions of other ETFs in the filing.

State Street Global Advisors unveiled a family of a dozen regional and country-specific SPDRs earlier this year; each fund tracks an MSCI “Quality Mix” index, which targets a combination of factors—value, quality and low volatility. With the U.S. thoroughly covered by alternatively weighted ETFs, it looks like the trend may now be pushing out into the international space.

International ETFs, particularly single-country funds, have long been dominated by iShares, which has nearly $64 billion in assets under management in 57 funds. The lineup covers 55 individual countries, and includes currency-hedged versions of the Japan and Germany funds. SSgA and Van Eck are clearly looking to make inroads with funds that are based on differentiated methodologies that take advantage of the growing interest in smart-beta strategies.

The unhedged funds in the Market Vectors filing include the following:

  • Market Vectors Asia ex Japan Equal Weight ETF
  • Market Vectors Europe Equal Weight ETF
  • Market Vectors India Equal Weight ETF
  • Market Vectors Italy Equal Weight ETF
  • Market Vectors Japan Equal Weight ETF
  • Market Vectors Mexico Equal Weight ETF
  • Market Vectors Russia Equal Weight ETF
  • Market Vectors South Korea Equal Weight ETF
  • Market Vectors South Africa Equal Weight ETF
  • Market Vectors Spain Equal Weight ETF
  • Market Vectors Taiwan Equal Weight ETF
  • Market Vectors Australia Equal Weight ETF
  • Market Vectors Brazil Equal Weight ETF
  • Market Vectors China Equal Weight ETF
  • Market Vectors Germany Equal Weight ETF
  • Market Vectors Hong Kong Equal Weight ETF

The currency-hedged funds include the Market Vectors Japan Hedged Equal Weight ETF, the Market Vectors Europe Hedged Equal Weight ETF and the Market Vectors Australia Hedged Equal Weight ETF.

All of the ETFs will be based on indexes created by Van Eck using the same basic methodology. Companies included in the indexes will either be domiciled in the fund’s designated geographic area or generate at least half of their revenues from that country or region, according to the prospectus. Stocks must also have market capitalizations of at least $150 million and meet certain liquidity requirements. Although the indexes are equally weighted, the components are selected based on their market capitalization, and each index should have at least 25 components.

The filing did not include any tickers or expense ratios, but it did indicate the funds will have their primary listing on NYSE Arca.

 

 

 

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