Today we focus on ETF alternatives that access Australia, which has long been dominated by EWA (iShares MSCI Australia Index, Expense Ratio 0.53%).
The fund has been around since 1996, and has gathered $2.4 billion in assets under management, averaging more than 2 million shares traded on a daily basis.
EWA has a decidedly mega/large cap slant, with companies of these market caps making up 85% of the overall portfolio and top holdings include companies like Commonwealth Bank of Australia (10.96%), BHP Billiton Ltd. (9.80%), and Westpac Banking Corp (9.50%).
Large cap names in Australia have handily out-performed small caps year to date and in the trailing one year period, which is evident when looking at charts of EWA versus KROO (IndexIQ Australia Small Cap, Expense Ratio 0.69%) and EWAS (iShares MSCI Australia Small Cap, Expense Ratio 0.59%). Both of these funds, offering small cap exposure to the Australian equity market, remain relatively un-recognized by the institutional community, with KROO garnering $12.7 million and EWAS $1.1 million in assets under management thus far amid sparse daily trading volume.
EWA heavily leans toward Financial Services names, making up 43.30% of the portfolio, and it should be obvious to anyone at this point that Financials, not just in the U.S. but largely on a global scale, have been a leading sector in terms of relative performance for at least the past year now.