ETF Watch: iShares Launches Argentina Fund

Today BlackRock’s iShares is putting Global X directly in its crosshairs with the launch of its Argentina ETF. The iShares MSCI Argentina and Global Exposure ETF (AGT) tracks the MSCI All Argentina 25/50 Index; that’s the same index tracked by the Global X MSCI Argentina ETF (ARGT).

AGT comes with an expense ratio of 0.59%, 15 basis points cheaper than the expense ratio charged by ARGT. The fund is listed on the Bats exchange, which is owned by ETF.com's parent company, CBOE.

The launch of AGT is an interesting move on iShares’ part. For one thing, ARGT, though a successful fund, is hardly a blockbuster, with less than $150 million in assets under management. iShares is clearly  looking to pull assets away from AGT with the lower price point and the power of its brand. But Argentina is a fairly tiny market that falls under the frontier rubric, which raises the question of how much interest there is from investors.

Broadened Appeal?

AGT’s name also emphasizes, unlike ARGT, the fact that this is not a strictly Argentina-focused fund. The index covers Argentina-listed stocks, and also the securities of companies that simply conduct the majority of their business there. This particular feature of the index could broaden its appeal because of the expanded coverage.

The fund’s underlying index has 25 components that are weighted by free-float market capitalization, with some modifications. The index caps the weight of individual components at 25% of its total market capitalization, and the stocks with weightings above 5% cannot represent more than 50% of the index.  

Contact Heather Bell at [email protected].