Investors focusing solely on a domestic
Recently, many investors have come to two related conclusions about the market: First, sectors drive market returns; second, it can be critical to invest in global markets.
Fortunately, ETFs exist that let investors act on both of those convictions. Barclays Global Investors offers a full lineup of global sector ETFs under the iShares brand, allowing an investor to utilize the power of sectors within the
It makes sense: Businesses across the globe seem to correlate most with other companies within sector groups, even before country, region, size and style. Correlations among countries can often be explained largely by sectors and the differences in sector allocations between their respective markets. Therefore, when reaching outside the
Ultimately, global returns can be explained by sector returns.
The Global Benchmark
The 10 global sector iShares ETFs represent the sector makeup of the S&P Global 1200, which represents 70 percent of the world’s market cap. The sectors are broken down from this index based on the 10 GICS (Global Industry Classification Standard) sectors, which are jointly managed by S&P and MSCI Barra. The table below shows the iShares global sector ETFs and their respective assets under management.
Source: iShares 10/7/09
The table below shows the weightings of the GICS sectors as of Sept. 30, 2009.
Data: Morningstar Office 9/30/09