For Immediate Release
Chicago, IL – May 1, 2012 - Stocks and funds in this article include: iShares MSCI ACWI Index Fund ), Vanguard Total World Stock ETF ), iShares MSCI World Index Fund ), SPDR MSCI ACWI IMI Fund ), Accuvest Global Opportunities ETF ). Eric Dutram looks at five ways investors can gain access to global markets via ETFs.
Five Great Global ETFs for Complete Equity Exposure written by Eric Dutram of Zacks Investment Research:
Over the past few years, ETFs have gained in popularity among sector-focused investors and those looking to do short-term trades. Leveraged and niche ETFs have seen huge inflows as a result, leaving many of their broader ETF counterparts in the dust.
Yet as markets have become shakier—and more correlated-- it could be worth it to take a more global approach to some portion of a portfolio. By doing this, and spreading risks around a host of nations and sectors, overall volatility can be lowered while still maintaining high levels of stock exposure (see more on ETFs at the Zacks ETF Center).
Furthermore, from a long-term perspective, an allocation to a global ETF could be a very cost effective way to achieve access to a variety of nations, both emerging and developed, and their respective markets. By using this strategy and dollar cost averaging, investors can make a broad bet on global growth without having to worry about sector or national specifics.
For these more hands-off investors, or those looking to make the broadest play possible, we have highlighted five of these global ETFs below. These funds look to cheaply and easily provide investors with complete exposure to equity markets around the world, irrespective of sectors. While they all have a similar focus, there are several key differences that investors need to be aware of before considering making a purchase in any of these ‘one-stop shop’ ETFs:
iShares MSCI ACWI Index Fund
This global ETF tracks the MSCI ACWI Index, a benchmark for global stock performance that looks to capture at least 85% of the total market capitalization in the world. With this focus, the fund holds over 1,200 securities in its basket, charging investors 34 basis points a year in fees (read Three Overlooked Emerging Market ETFs).
In terms of sector exposure, the fund is tilted towards financials (16%), and technology (13%), while energy and cyclical consumer make up 11% each of the product as well. Country allocations are heavily tilted towards the U.S.—47% of the total—while a host of developed markets round out the rest of the top seven nations, although developing countries do receive some allocation as well.
The product is extremely popular among all stripes of investors as it has over $2.6 billion in AUM despite being just a little over four years old. The global ETF also has an impressive daily volume of over 700,000 shares while the annual yield—at 2.2%-- is nothing to sneeze at either.
Vanguard Total World Stock ETF
Vanguard’s entrant in the space is VT, a global ETF that follows the FTSE Global All Cap Index. This benchmark provides investors with exposure across a variety of markets, holding nearly 750 securities in total and charging a rock-bottom 22 basis points in fees per year (see Ten Biggest U.S. Equity Market ETFs).
For the rest of this ETF article, please visit Zacks.com at: http://www.zacks.com/stock/news/74073/five-great-global-etfs-for-complete-equity-exposure
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Contact: Eric Dutram