May 28, 2008 at 1:00 am by Tom Lydon
All-world exchange traded funds (ETFs) are the latest industry hot spot, and providers are lining up to launch them.
The two-month-old Barclays fund iShares MSCI ACWI Fund (ACWI) holds 694 stocks from the 2,736-stock underlying index.
Joe Morris for Ignites breaks this down for us as 46% in U.S. and Canadian companies, one quarter devoted to Japan, the United Kingdom, France and Germany, with smaller bits given to emerging markets such as South Korea, Russia, Brazil, China and India.
There are several other ETFs of this type in registration with the Securities and Exchange Commission (SEC). Vanguard is planning a Total World Stock index, with share classes for ETF, retail and institutional investors. The fund will track the FTSE All-World Index, which is made up of 2,800 large- and mid-cap companies from 48 countries.
Northern Trust has similar plans for its own such fund, which will track the Dow Jones Wilshire Global stock index.
The appeal of these funds is the automatic diversification around the world they offer without big expenses. The complaint is that they often own the same countries, sectors and stocks, and investors can’t pick and choose which stocks they want to own and which they’d rather avoid. But for the investor who just wants to get it done and sit back, these could be an option.
Tags | Asia, Brazil, Canada, China, Eastern Europe, Emerging Markets, Europe, EWG, EWQ, EWU, France, Germany, India, Japan, Latin America, Mid-Cap, Russia, South Korea, United Kingdom
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August 27th, 2008 at 2:33 pm
There is a useful tool at http://www.assetcorrelation.com that lets you check the degree of correlation between various sector- and geography-focused index funds.