Barclays Global Investors launched a new ETF today. It is called iShares MSCI ACWI Index Fund, and its symbol is ACWI.
With one simple click, you can obtain exposure to the world stock market and its potential return.
This is an important ETF for several reasons. First and foremost, never before have investors had the ability to own the world in one convenient package.
In the past, if you were attempting to build a global portfolio, you would have had to independently build a portfolio using the following components:
- N. America (w/ emphasis on U.S. and Canada)
- Europe (w/ emphasis on the U.K., France, Germany, Switzerland, and Italy)
- Asia (w/ emphasis on Japan, China, S. Korea, Russia, Taiwan, Hong Kong, and India)
- S. America (w/ emphasis on Brazil)
- Africa (w/ emphasis on S. Africa)
In order to put together a portfolio concentrated on the world stock market, an investor may have purchased the following ETFs: SPY, EFA, and EEM. That’s three ticket charges every time you make a transaction for the group.
Plus, with those three ETFs, you wouldn’t have exposure to Canada, which is approximately 3.67% of the global market cap.
Another benefit with ACWI; you capture returns from the following countries not represented in EFA or EEM: Jordan, Pakistan, Morocco, Columbia, and Argentina.
The key is one ticket and a rock bottom 0.35% annual expense ratio. What’s not to like?
ACWI represents $32.2 trillion total market cap. There are 711 holdings today, with an average market cap of $11.2 billion.
Top five sectors:
- Financials 22.5%
- Energy 11.7%
- Industrials 11.2%
- Information Technology 10.9%
- Consumer Discretionary 9.2%
A 5-year annualized return as of 12/31/07 = 18.24%
In the same time period, the S&P 500 = 12.83% and MSCI EAFE = 21.59%
Top five countries:
- United States 41.8%
- United Kingdom 9.6%
- Japan 8.6%
- France 4.7%
- Germany 4.1%
For investors with an exclusive emphasis on U.S. stocks and in dire need of international diversification, a sibling fund was launched today as well — iShares MSCI ACWI ex US Index — symbol ACWX.
Speaking of fund launches, we were the first official buyer of ACWI this morning!
100 shares at $50.0999 at 8:46:25 CDT on 3/28/08
The house account certainly looks to profit with this trade!
Bottom line: In today’s global marketplace, investors would be well served keeping an eye on ACWI. If you are prone to keeping score, you should periodically check your portfolio’s performance against the MSCI ACWI Index from time to time.