State Street Global Advisors has launched two equity exchange-traded funds designed to track MSCI Global Equity Indices, with one focusing on emerging markets and the other widely covering both developed and developing countries.
The first fund, the SPDR MSCI EM 50 ETF, aims to replicate the performance of the MSCI EM 50 Index, which is composed of the 50 largest and most liquid companies constituting the MSCI Emerging Markets Index.
The MSCI EM 50 Index uses filtering criteria to exclude some of the smallest emerging market countries and includes depositary receipts for some markets.
As of January 31, its major sector weights included financial stocks, at 23.32%; energy, at 21.88%; information technology, at 19.50%, and materials at 12.61%. Its largest holdings as of that date included Samsung Electronics Co., Taiwan Semiconductor MFG, Gazprom ADR and China Mobile.
The emerging market fund’s expense ratio is 50 basis points.
“Against a backdrop of a reduction in emerging market equity values in 2011, the asset class now offers a more attractive entry,” said James Ross, senior managing director and global head of SPDR Exchange Traded Funds at State Street Global Advisors.
He said that the fund enhances his firm’s SPDR offerings and provides investors with “very precise access to a well-established index.”
The second fund, the SPDR MSCI ACWI IMI ETF, follows the MSCI All Country World Investable Market Index. This index covers up to 98% of developed and emerging investable markets.
As of December 31, it consisted of 8,920 publicly traded securities across 45 countries. The major sector weights of this fund included financials, at 18.20%; information technology, at 13.14%; energy at 12.32%, and industrials at 11.68%. Its major holdings include Apple Inc., Exxon Mobil Corp., Google Inc.-Class A and Microsoft Corp.
The expense ratio of this fund is 25 basis points.
Ross said that the All Country World fund “provides investors with an opportunity to capture the global equity investment opportunity set in a single trade.”
“As awareness of the benefits of reducing home country bias in a portfolio grows, global equity is increasingly viewed as a single, core asset class,” he said.
State Street Global Advisors manages more than $274 billion in SPDR ETF assets worldwide.
Tommy Fernandez writes for Money Management Executive.