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ETF News And Commentary

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Although the ETF world has grown tremendously in recent months, there are still a few holes in the global lineup of funds available to investors.  However, seemingly every month a few more of these gaps close up, giving investors even more choices across the globe in order to target increasingly segmented sectors or industries. In continuing with this trend, iShares, the San Francisco-based ETF leader by assets under management, recently debuted seven more products, increasing its lineup to just under 250 funds.

While many of the products will tap into brand new spaces, a few will face some competition from already launched ETFs, generally from either IndexIQ or Global X. All of the product will, however, focus in on individual nations and the stocks trading within their respective countries. For investors interested in further diversifying their exposure across national boundaries, we have briefly highlighted some of the key points for each of these seven new iShares ETFs below:

MSCI Denmark Capped Investable Market Index Fund (EDEN - ETF report)

This ETF follows the MSCI Denmark IMI 25/50 Index, a benchmark of firms based in the Nordic nation of Denmark. The product holds 31 securities in total and charges investors 53 basis points a year for its services. Currently, the product is heavily concentrated in a few industries as health care makes up just under 35% while industrials occupy another quarter of total assets. The fund is also heavy from an individual security perspective as well as Novo Nordisk takes up close to 23.6% of assets while the top ten securities make up nearly 63% of the total. While this might seem like heavy concentration levels, investors should note that this is currently the only pure play option available on the market today for Danish exposure.

MSCI Finland Capped Investable Market Index Fund (EFNL - ETF report)

For those seeking exposure to the Nordic country of Finland, EFNL could be an interesting choice. The product tracks the MSCI Finland IMI 25/50 Index which is a benchmark of firms that trade on the Helsinki exchange. ENFL holds 42 securities in total and like its Danish counterpart, charges investors 53 basis points a year in fees. The fund is reasonably spread out across sectors as industrials take the top spot at 26.9% which is then followed by tech (19%), materials (14.6%), and financials (13.2%). In terms of individual securities, global giant Nokia dominates with 17.6% of assets, although three more companies make up at least 7% of assets as well. This product also represents a new country available to ETF investors as EFNL is the only fund currently tracking the country.

MSCI Norway Capped Investable market Index Fund (ENOR - ETF report)

For a new way to play Norway, investors now have this product which tracks the MSCI Norway IMI 25/50 Index. This product holds 52 securities in total and charges investors 52 basis points a year in fees—in line with most other products on this list. Thanks to the heavy dependence of Norway on commodities, investors shouldn’t be surprised to read that energy stocks make up more than half of the benchmark while materials comprise another 8.8% of assets as well. For individual holdings, Statoil also receives a prime position as the firm controls close to 22.7% of assets in ENOR. With this being said, investors should note that the product is likely to face competition from the Global X Norway ETF (NORW - ETF report) which currently has just under $50 million in assets and trades about 90,000 shares a day. This fund is slightly cheaper than ENOR—charging 50 basis points a year—although it is has a similar holdings makeup.

MSCI Australia Small Cap Index Fund (EWAS - ETF report)

If investors are looking to play pint sized securities in Australia, the new EWAS could help in that task. The fund holds over 200 small cap stocks based in Australia and charges investors 59 basis points a year in fees for its services. Materials and industrials combine to make up roughly 45% of the portfolio while financials and consumer discretionary firms each take up another 13% of assets each. However, the fund is quite spread out from an individual security perspective as no one holding takes up more than 2% of the total. EWAS could see some competition though, especially from the IQ Australia Small Cap ETF (KROO - ETF report). This fund has about $15 million in AUM and trades just under 15,000 shares a day on average. The product does charge more in expenses but the holdings are more concentrated into basic materials than its iShares counterpart. 

MSCI Canada Small Cap Index Fund (EWCS - ETF report)

In order to make a small cap bet on our neighbors to the north, investors can now try out EWCS for exposure. The fund holds close to 250 securities in total and charges investors 59 basis points a year in fees. Unsurprisingly given the Canadian economy’s reliance on commodities, materials and energy combine to make up close to 60% of the total assets in EWCS and dominate the fund. Yet, from an individual holding perspective, no one firm occupies more than 2% of the total and the top ten accounts for less than 13% of assets. Investors should note, however, that EWCS could see stiff competition from two funds in the space; the S&P/TSX Venture 30 ETF (TSXV) and the IQ Canada Small Cap ETF (CNDA - ETF report). Both products are more expensive than EWCS but could offer a slightly different focus than the iShares counterpart.

MSCI Germany Small Cap Index Fund (EWGS - ETF report)

Germany, the fifth largest economy in the world by GDP PPP, only has a handful of ETFs tracking its markets but that is slowly beginning to change. This is best seen in the case of EWGS which looks to follow a benchmark of small cap stocks traded in Germany. The product holds 80 securities in total, and charges, just like its counterparts, 59 basis points a year in expenses. For sector exposure, EWGS has a heavy focus in industrials (33.9%), followed by tech (14.9%), and then a smattering of sectors which have at least 11.4% of the total assets. Investors should note, however, that the fund looks to face stiff competition from the Market Vectors Germany Small-Cap ETF (GERJ - ETF report). This product only has $3 million in AUM but does manage to beat out EWGS on expenses by four basis points a year.

MSCI United Kingdom Small Cap Index Fund (EWUS - ETF report)

For iShares last entrant in this latest round of expansion, investors look to have the first and so far only way to play British small cap securities in ETF form. The new fund, EWUS, looks to give investors access to close to 270 securities while charging 0.59% a year in fees. Top sector holdings of the fund include industrials (24%), followed by heavy weightings to consumer discretionary (20.4%), and financials (18%). Like many of the small caps on this list, the fund does do a good job of spreading out exposure across companies; EWUS puts just under 13% of its assets in the top ten holdings.

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