Northern Trust Launches Three More International ETFs

Northern Trust is providing more choices for investors who want international exposure in their exchange traded fund (ETF) portfolios with the launch of three more funds.

The new funds, which cover Italy, South Africa and Singapore, are:

• S&P/MIB Index Fund (ITL): tracks the price and yield of publicly traded companies in the Italian equity markets. Stocks are traded on the Borsa Italiana and are free-float adjusted, with a market-cap weighted index.
• NETS FTSE/JSE Top 40 Index Fund (JNB): tracks the price and yield of publicly traded companies on the South African stock exchange. Focuses on the top 40 companies on the Johannesburg stock exchange.
• NETS FTSE Singapore Straits Times Index Fund (SGT): consists of 50 of the most liquid stocks, based on average daily trading volume, traded on the Singapore stock exchange.

Northern Trust began rolling out its line of international ETFs last month, and there are more yet to come, including an Ireland ETF.

Will Italian Elections Deliver Some Amore to Its ETF?

Upcoming elections are leaving the fate of economic reforms that could affect its exchange traded funds (ETFs) hanging in the balance.

The crop of candidates aren't exactly setting Italians' hearts on fire: A lackluster ballot with an aging political establishment on both the right and the left are prompting many natives to give up their vote. Voter turnout has historically been high in the country.

Sylvia Poggioli for NPR reports that the Italian economy is going through a crisis, with growth at zero and one in seven families unable to live off their yearly income.

Even more frightening, Italian workers are the lowest paid in Europe. But the politicians have the highest salaries in Europe. Polls are showing that only a small percentage of Italians trust their politicians.

Former Prime Minister Silvio Berlusconi is running on the right. He comes attached with a pacemaker and facelifts, along with 5 years in office that did not deliver. He has also faced about a dozen corruption trials.

Walter Veltroni is running for the center-left, targeting the local mafias that keep local economies frozen. He wants a more efficient state, with more incentives for venture capitalists and a renewed desire to take chances.

Veltroni's leadership may be a ray of hope for the iShares MSCI Italy Index (EWI), which is down 7.1% year-to-date.

If there's a tie, both sides might have to join forces to pass the badly needed reforms.

The European ETF Market Compared To The U.S.

While most of our coverage centers on exchange traded funds (ETFs) listed in the United States, we realize that they aren't just a U.S. phenomenon. We might have the largest market for them, but Europe, Asia and Latin America all boast fast-growing ETF industries of their own.

At the end of 2007, the European ETF market had amassed assets of $128.4 billion in 423 funds, reports Paul Amery for Index Universe.

iShares is the leading ETF provider in both here and in Europe, while State Street Global Advisors is the second-largest provider in the United States. The lack of similarity of product providers within the two markets is interesting, but as time goes on there will be more overlaps.

As for asset class, fixed income has almost three times the amount in fixed income that Americans do, thanks to Europeans' historical preference for bonds. Both markets have a  strong domestic bias, but the European equity sector is less interested in overseas investing than the United States is.

More than half of the ETFs in the United States are held by retail investors; in Europe, it's closer to one-third, but data backing up this figure isn't easy to find.

Europe has special challenges, thanks to differences between the countries. Most of them might be using the same currency, but their cultures and legal systems are not the same. It's also typical to have ETFs cross-listed between exchanges, since each country generally has its own. Often, you'll see primary listings, then secondary ones.

In a country-by-country breakdown, Germany has the largest number of primary listings: 157. It's followed by France (119), United Kingdom (84), Switzerland (21) and Italy (6).

You Can't Always Judge an ETF By Its Name

In December, Barclays added another international exchange traded fund (ETF) to its lineup: the iShares MSCI Kokusai Index Fund (TOK).

 TOK covers 1,203 holdings in 22 developed markets, minus Japan, with the United States taking the most holdings at 50%. The second-largest constituent is the United Kingdom, at 12%. There are also holdings in Austria, Belgium, Ireland, Italy, New Zealand, Spain, Sweden and Switzerland.

The largest holding is ExxonMobil Corp. (XOM) at 2%. It's most heavily concentrated in financials, at 24.7%. When the fund launched, Matt Hougan for Index Universe wondered if it wasn't a strange product to launch on a U.S. exchange since, after all, most U.S. investors are already invested in this market and would instead want exposure to Japan in their portfolios.

But the most intriguing thing about the fund, we think, is its name: "kokusai" is the Japanese word for "international." It's an interesting choice of word for a fund with no holdings in Japan.

Spa Market Grader ETFs Going International

Spa MarketGrader's exchange traded funds (ETFs) are now ready to take on Italy, months after launching their funds on the American Stock Exchange.

Their six U.S. equity-focused Market-Grader ETFs will appear on Milan's Borsa Italiana stock exchange. MarketGraders 40, 100 and 200 ETFs, reports HedgeWeek, are based on core indexes of top-rated North American securities. They also have small-cap, mid-cap and large-cap indexes based on North American companies.

These ETFs are based on fundamentally driven indices created by research firm MarketGrader. All stocks are equally weighted and the indexes are rebalanced quarterly. Twenty-four quantitative filters have been used to construct them.

Italy Has a Trashy Issue - Will It Become ETF's Problem, too?

Could Naples' garbage problem cause Italy's exchange traded fund (ETF) to smell a little ripe?

The problem, reports Robin Pomeroy for Reuters, is that garbage has been accumulating in the city since Dec. 21. Dumps in the area have been declared full and the island of Sardinia has taken on most of the overload. Sixty schools were shot down after their entrances became blocked by the growing piles.

Will it affect the iShares MSCI Italy Index (EWI) at all? If it drags on long enough, it might -- the trash problem has already hurt the local economy as tourists are staying far away from the stink.

Naples authorities have been shipping mountains of trash to other parts of Italy and the deliveries are causing skirmishes to break out for the first time in the weeks-long crisis. Islanders in Sardinia had it out with police when a ship loaded with refuse arrived Thursday, as gangs torched garbage cans, cars and started numerous fires.

The European Union prompted the bloc's executive to speed up legal proceedings it has already launched against Rome. Meanwhile, Naples is upping the waste quantity that it sends to incinerators in Germany.

It looks like the problem could be resolved soon, and the ETF and related stocks can say Ciao! to the rubbish accumulating.

Italy's ETF; an ETF Tony Soprano Could Love

Could companies within the Italian exchange traded fund (ETF) iShares MSCI Italy Index (EWI) have ties to the mafia? Organized crime represents the biggest segment of the Italian economy, accounting for more than $127 billion in receipts and 7% of Italy's gross domestic product (GDP), reports Peter Kiefer for The New York Times. Currently, EWI is up 4.1% year-to-date.

The news reflects a trend that has been ongoing for a few years, according to an annual report released yesterday. The report said it was becoming more difficult to tell the difference between legitimate business and criminal activity. The various forms of organized crime are extortion, usury, contraband, robberies, gambling and Internet piracy. The report also said that 80% of businesses in the cities such as Catania and Palermo regularly pay protection money, called "pizzo."

Italy's ETF Needs Amore

Financial market turmoil has given Italy's iShares MSCI Italy Index (EWI) exchange traded fund (ETF) a rough time this year. In fact, Italy's economy has been so turbulent, the government is considering lowering its economic growth forecast for next year, according to Guy Dinmore and Ralph Atkins for the Financial Times. The governor of the Bank of Italy says that even before taking into account current market conditions, growth could be 0.2 percentage points lower than the 2% and 1.9% prediction for this year and 2008. Despite the bad economic forecast, EWI currently is up 3.6% year-to-date.

Declining European ETFs

Some country-based exchange traded funds (ETFs) in Europe seem to be slipping lately. iShares MSCI Italy Index (EWI), iShares MSCI Belgium Index (EWK) and iShares MSCI Austria Index (EWO) look as if they're breaking down, says Tate Dwinnell for Self Investors. Year-to-date, EWI is down 1.7%, EWK is down 3.5% and EWO is down 2.1%.

Reasons for the declines vary by country. Unstable politics and slow economic growth, according to economic data from The Economist, are a few factors in Italy's declining performance. In Belgium's case, financials and banks make up more than 50% of its ETF, says Carl Delfeld for ETF XRAY. Considering those areas are the hardest hit by subprime and credit problems, it's no wonder EWK has been pulled down with it. Austria has been hampered with weak domestic consumption that has kept its growth rate below 3%, according to the CIA World Factbook.

Italy's ETF Rising Despite Lagging Economy

Despite Italy's lagging economy, the Italy exchange traded fund (ETF) is on the up. The iShares MSCI Italy Index (EWI) is up 5.5% for the last month and 28% year-to-date. The ETF has holdings in the banking industry, energy, telecommunications and utilities. Although Italy's debt and deficit are among the largest in the European Union, the fund has turned north and grown 123% since the decline between '98 and 2003, reported by Alan R. Elliot of Investor's Business Daily.

Italy's world cup win didn't stimulate the economy as anticipated by many observers, however, much economic restructuring is taking place at the moment to help with the deficit.

Italy's Win a Hopeful Boost for ETF (EWI)

Italy's win in the World Cup could help boost their economy.  With such a victory, Italians are feeling confident, enough so that some believe there could be an ease on budget cuts with increased.  There is hope that the win over France will boost the country's economic performance.

The exchange traded fund, iShares MSCI Italy (EWI), is up 15% year-to-date and 5% over the past month.  EWI continues to trade above its trend line.  Top holdings in this ETF include Eni, an energy company making up 18%; UniCredito Italiano Group, a bank group representing 13% of the fund; and Enel, an electric company which is 9% of EWI.

Italy ETF (EWI) Strong as Italians Go To Polls

Italians go to the polls on Sunday in a general election that could unseat Prime Minister Silvio Berlusconi after five years of economic stagnation.

Opinion polls have not been published in two weeks, but the prime minister has trailed the opposition centre-left, headed by Romano Prodi, for the past two years.

Berlusconi, the U.S. government’s strongest ally in continental Europe and Italy’s richest man, still hopes his promises of tax cuts will swing a surprise victory. But even he spoke of possible defeat in the final days of campaigning.

In the mean time, iShares MSCI Italy (EWI) is trading close to all-time highs. The fund is full of the largest banks and telecom companies in Italy. Italian stocks have favored well lately despite the political and economic uncertainty. Maybe somebody is telling us something.

Italy ETF (EWI) Lights Olympic Flame

The XX Winter Olympic Games begin today in Turin, Italy. Expect the Italian economy to get a boost in the arm as it will be shown on millions of televisions around the world.

iShares MSCI Italy (EWI) is the only exchange traded fund representing the region. The largest holding, Eni - an energy company, is the official gas supplier for the flame in the cauldron, the torches that were carried across the country and the heating of the sports structures.  Other top holdings include banks and telecommunications companies that will surely benefit from the increase in tourism. EWI continues to trade above its 200-day moving average.