Finally, an ETF for New Zealand: ENZL

September 10, 2010 by  
Filed under Commentary, ETF IPOs (New ETFs), ETFs

The iShares MSCI New Zealand Investable Market Index Fund (ENZL) began trading September 2, 2010.  The underlying index is a free-float adjusted market capitalization weighted index designed to capture 99% of the market cap of securities listed for trading in New Zealand.

According to the BlackRock press release, this is 30th single-country ETF carrying the iShares brand.  Although there are now more than 100 single-country ETFs on the market, this is surprsingly the first to target stocks from the developed market of New Zealand.  Additionally, five more of the 24 developed (as defined by MSCI) markets are still without a single-country ETF.

The ENZL fact sheet (pdf) indicates the fund holds 23 stocks, and those with allocations greater than 5% include Fletcher Building 19.9%, Telecom Corp of New Zealand 16.3%, Auckland International Airport 7.8%, Sky City Entertainment Group 7.5%, and Contact Energy 7.5%.

The largest sector weightings include Materials 23.2%, Telecommunications 16.3%, Consumer Discretionary 14.1%, Industrials 13.1%, and Utilities 12.6%.  The ENZL overview page currently does not show the expected yield, but the total return version of the underlying index added +4.4% to the price index over the past year net of foreign taxes.  With an expense ratio of 0.55%, ENZL could yield nearly 4%.

A vicious magnitude 7.1 earthquake struck the Canterbury region of New Zealand last Saturday, centered about 20 miles west of Christchurch.  Aftershocks continue to threaten the area, and the damage has been estimated at $1.4 billion (US).  The earthquake is not expected to have a long-term impact on New Zealand’s economy.

Although this is the first equity ETF to target New Zealand, the WisdomTree Dreyfus New Zealand Dollar Fund (BNZ) has been available since June 2008.

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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