If you thought the rollout of 14 international and global ETFs in early February was enough for one month, then think again. The latter half of the month produced yet another 15 international ETFs. This wave consists of seven single-country and two small cap ETFs carrying the First Trust AlphaDEX banner, two dividend funds from iShares, two high beta products from PowerShares, along with SPDR “all country” and emerging market ETFs.
Names and tickers of the 15 new ETFs, launch dates, number of holdings, expense ratios, links to sponsor provided details, and my initial comments follow:
1) First Trust Australia AlphaDEX Fund (FAUS) listed on 2/15/12 holding 40 stocks with an expense ratio of 0.80% (FAUS summary).
2) First Trust Canada AlphaDEX Fund (FCAN) listed on 2/15/12 holding 40 stocks with an expense ratio of 0.80% (FCAN summary).
3) First Trust Germany AlphaDEX Fund (FGM) listed on 2/15/12 holding 40 stocks with an expense ratio of 0.80% (FGM summary).
4) First Trust Hong Kong AlphaDEX Fund (FHK) listed on 2/15/12 holding 40 stocks with an expense ratio of 0.80% (FHK summary).
5) First Trust Switzerland AlphaDEX Fund (FSZ) listed 2/15/12 holding 40 stocks with an expense ratio of 0.80% (FSZ summary).
6) First Trust Taiwan AlphaDEX Fund (FTW) listed 2/15/12 holding 40 stocks with an expense ratio of 0.80% (FTW summary).
7) First Trust United Kingdom AlphaDEX Fund (FKU) listed 2/15/12 holding 75 stocks with an expense ratio of 0.80% (FKU summary).
Analysis/Opinion: The seven single country ETFs from First Trust will compete against the popular MSCI cap-weighted products from iShares, many of which have been around since 1996 and carry lower expense ratios (typically about 0.55%). It will likely require significant time for First Trust to convince investors the extra expenses of the AlphaDEX approach are worthwhile.
8) First Trust Developed Markets ex-US Small Cap AlphaDEX Fund (FDTS) listed on 2/16/12 holding 388 stocks with an expense ratio of 0.80% (FDTS summary).
9) First Trust Emerging Markets Small Cap AlphaDEX Fund (FEMS) listed on 2/16/12 holding 194 stocks with an expense ratio of 0.80% (FEMS summary).
Analysis/Opinion: The two new international small cap ETFs from First Trust also face stiff competition. FDTS goes up against eight existing products in the same space, all with lower expense ratios. FEMS faces somewhat better odds with “only” three other lower-priced ETFs in the emerging markets small cap space.
10) iShares Asia/Pacific Dividend 30 Index Fund (DVYA) listed 2/24/12 holding 30 stocks with an expense ratio capped at 0.49% (DVYA overview).
11) iShares Emerging Markets Dividend Index Fund (DVYE) listed 2/24/12 targeting 100 leading dividend paying stocks with an expense ratio capped at 0.49% (DVYE overview).
Analysis/Opinion: It continues to amaze me that many firms launch ETFs with “dividend” in their name while supplying absolutely no information about those dividends or the expected yield. These two new dividend focused international ETFs from iShares appear to be targeted at similar products from WisdomTree. DVYE will have an expense advantage over the entrenched WisdomTree Emerging Markets Equity Income (DEM), while DVYA has the advantages of lower expenses and the fact that WisdomTree’s Asia Pacific ex-Japan (AXJL) hasn’t yet caught on with many investors.
12) PowerShares S&P Emerging Markets High Beta Portfolio (EEHB) listed 2/24/12 targeting 200 high beta (12 months) stocks with an expense ratio capped at 0.29% (EEHB overview).
13) PowerShares S&P International Developed High Beta Portfolio (IDHB) listed 2/24/12 targeting 200 high beta stocks with an expense ratio capped at 0.25% (IDHB overview).
Analysis/Opinion: PowerShares added an international flavor to its existing lineup of high beta funds with the introduction of EEHB and IDHB. They will not face any direct competition because Russell excluded high beta funds from its international rollout. However, PowerShares still made an aggressive entry with expense ratios capped at just 0.29% and 0.25%.
14) SPDR MSCI ACWI IMI ETF (ACIM) listed 2/28/12 and will employ a sampling strategy on the 8894 index holdings with an expense ratio of 0.25% (ACIM overview). The underlying index has a 2.1% dividend yield.
15) SPDR MSCI EM 50 ETF (EMFT) listed 2/28/12 holding 50 stocks with an expense ratio of 0.50% (EMFT overview). The underlying index has a 3.0% dividend yield.
Analysis/Opinion: The new offerings from State Street help round out the SPDR product line. Surprisingly, ACIM is its first “all country” one-stop shopping equity fund and will have to compete with iShares MSCI ACWI (ACWI) and Vanguard Total World Stock ETF (VT). Additionally, the entrenched competition for diversified emerging market ETFs is nothing short of fierce, including State Street’s own SPDR S&P Emerging Markets (GMM). EMFT will attempt to differentiate itself by holding just 50 stocks, essentially making it a large cap fund. State Street should be congratulated on keeping the names of these new ETFs relatively short and supplying dividend information even though they are not “dividend” products.
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.