iShares UK launched a major expansion of its exchange-traded fund (ETF) franchise in November. The firm announced a three-week roll-out of fourteen new ETFs, covering everything from global and emerging markets to dividends, real estate and inflation-protected bonds. When complete, the new funds will double the number of iShares ETFs on the market in the UK.
The launch plants a stake in the ground, and shows that Barclays Global Investors (BGI) believes that the UK and European ETF market is primed for continued growth.
"This launch reflects our strategy to offer a more complete product set to our investors, who have been asking for these types of funds," said Chris Sutton, president of iShares UK. "Launching fourteen iShares simultaneously will leave no one in any doubt about our positioning and capabilities as a global leader in the ETF market."
The new products are:
- iShares MSCI World: A broad market fund tracking the global developed market.
- iShares MSCI AC Far East ex-Japan: A fund tracking nine countries in the Far East, including China, Korea and Taiwan.
- iShares MSCI Taiwan: Self-explanatory.
- iShares MSCI Brazil: Ditto.
- iShares MSCI Korea: Ditto.
- iShares MSCI Emerging Markets: A fund tracking twenty-six developing countries, from Russia to Egypt to Brazil. Familiar to U.S. investors as the $7 billion "EEM" fund.
- iShares MSCI Eastern Europe: An interesting new product covering Russia, Poland, Hungary and the Czech Republic; there could be a lot of interest for this one.
- iShares AEX: A stand alone fund tracking the 25 most active securities in Holland.
- iShares DJ Euro STOXX Growth: Large-cap European growth stocks
- iShares DJ Euro STOXX Value: Large-cap European value stocks
- iShares DJ Euro STOXX Select Dividend: Like the DVY in the U.S., only for Europe - this fund tracks the 30 highest yielding equities in the Eurozone, relative to their home market.
- iShares FTSE/EPRA European Property Index Fund: This fund invests in real estate and property companies in ten European countries, with a heavy weighting in Holland and France.
- iShares FTSE UK Dividend Plus: The high-yield fund tracks the 50 highest yielding equities in the Eurozone UK, with stocks selected from the FTSE 350 Index. The historic yield on this fund is an impressive five percent.
- iShares € Inflation Linked Bond: A bond fund that purchases inflation-linked bonds from EU member countries.
BGI plans to roll the new funds out across Europe over time.
"Investors in the UK are now beginning to see the real benefits of ETFs," said Sutton. "If the growth in assets of the funds we launched about a year is anything to go by, the new product set should be an equally huge success."
Those funds include the $1.1 billion iShares MSCI Japan Fund, the second largest iShares Europe fund by assets. The largest fund - the EURO 3 billion iShares DJ Euro Stoxx 50 - launched in 2000.
Barclays is in a three-way race in Europe to be market leader in the ETF industry. Based on the most recent statistics, they ranked a close third with 22.1 percent of the market, trailing Lyxor International Asset Management (23.8 percent) and Indexchange (22.8%). Europe is currently the fastest growing market for ETFs in the world, with assets under management up a strong 41.5 percent this year to $48 billion. (Data: Morgan Stanley).
The feeling among industry watchers is that the Europe ETF market remains fragmented, and that there is still the opportunity for large share gains by the larger players. IShares certainly hopes these funds will let it do just that.