Tom Lydon of ETF Trends joined CNBC’s Jeff Cox Monday to discuss the Alibaba initial public offering and its impact on exchange traded funds. As has been previously noted, Alibaba will not be eligible to join major U.S. ETFs such as the SPDR S&P 500 ETF (NYSEArca: SPY) and the PowerShares QQQ (NasdaqGM: QQQ).
There are also split decisions among index providers regarding the stocks inclusion in some major global indices used by some of the largest emerging markets ETFs. Last week, S&P Dow Jones Indices said Alibaba will be eligible for inclusion in all standard S&P Dow Jones Global Benchmarks that include Chinese stocks. Rival MSCI (NYSE: MSCI) is mulling rules changes that could allow Alibaba to enter some of its indices, though that would not happen until March 2015.
On Monday, it was revealed that Alibaba will not be included in the First Trust US IPO Index Fund (NYSEArca: FPX), the largest IPO ETF. However, a new international equivalent of FPX due out next month could include Alibaba.