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5 Things To Watch Out For In International Equity ETFs

Michael Johnston — Wed, 18 Jan 2012 12:00:36 +0000

As the ETF universe has expanded dramatically over the last several years, many investors have taken advantage of this asset class to tap into international equity markets. With single-country ETFs dedicated to dozens of developed and emerging markets, accessing the major (and not-so-major) stock markets around the globe has never been easier. When evaluating international equity ETFs–as with all ETFs–it is important to take a look under the hood and fully understand what the portfolio includes. Below, we highlight a few relatively common characteristics of international stock ETFs that might be somewhat disconcerting to investors [for more ETF insights, sign up for the free ETFdb newsletter]: 1. Major Sector Biases Many international equity ETFs feature some big tilts towards certain sectors of the economy, giving heavy weightings to certain types of companies while overlooking others altogether. That can result in concentrated risk for investors, especially when ETFs highlight sectors such [...]

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ETF Shakeups: Three Small Cap Funds To Close, VT To Get Small Cap Extension

Michael Johnston — Wed, 21 Dec 2011 14:00:36 +0000

The universe of U.S.-listed ETFs has expanded at a record pace in 2011, with more than 300 new products beginning to trade. This year has also seen some contraction, as a number of different issuers have shuttered products that failed to generate interest from investors. IndexIQ is the latest to pare its lineup, as the company has announced it will close three of its international equity ETFs before the end of the year. The ETFs to be closed are: IQ Taiwan Small Cap ETF (TWON) IQ Hong Kong Small Cap ETF (HKK) IQ Japan Mid Cap ETF (RSUN) [For updates on closing ETFs and analysis of new ETFs, sign up for the free ETFdb newsletter] The three ETFs have combined assets of only about $5 million, which represents only a small fraction of the company’s total. None of the three was around for very long; TWON debuted in May 2010, [...]

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Taiwan ETF (EWT) Surges Higher On Trade Rumors, Robust Earnings

Eric Dutram — Tue, 06 Jul 2010 20:13:50 +0000

Recent economic developments have hammered equity ETFs around the world, as investors brace for the possibility of a double dip recession at the worst and lingering uncertainty over Europe at the best. One area hit especially hard has been China, which is trying to cool off its overheating economy by hiking rates and curtailing lending. While this is likely good news for the Chinese economy in the long-run, the short term ramifications have rippled throughout the global economy. Copper prices have suffered from expectations of sliding demand, while equities in Taiwan, which finds itself growing increasingly dependent on trade for China to fuel its export growth, were impacted as well [also read Five ETFs For An Asia-Centric World]. Despite disappointing news out of the larger global economy, several promising developments have come out of Taiwan recently on the political front. The most important was a trade deal with mainland China [...]

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Will Historic Trade Deal Boost Taiwan ETFs?

Eric Dutram — Tue, 29 Jun 2010 19:24:44 +0000

Ever since the days of Mao Zedong and Chiang Kai-shek in the late 40′s and early 50′s, mainland China has had a strained relationship with Taiwan. In recent years, however, the economic ties between the regions have improved considerably. The recent economic crisis, as well as efforts from Taiwan President Ma Ying-jeou, have pushed the two historic rivals closer together. In fact, one could argue that in the past two years more has been done to bring the two together than in the previous twenty. This trend continued with an announcement today of a historic deal between the two rapidly-growing economies. China will cut duties on fuel oil, copper foil and about 500 other Taiwanese goods that account for about $13.8 billion of annual. Meanwhile, Taiwan will lower tariffs on 267 items from China that account for close to $3 billion, or roughly 10.5% of the China’s exports to the [...]

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Taiwan ETFs In Focus After Surprise Rate Hike

Michael Johnston — Thu, 24 Jun 2010 13:37:49 +0000

Taiwan’s central bank shocked investors on Thursday by announcing the first interest rate hike in nearly two years, a move reflecting increased confidence in country’s economic outlook. The Central Bank of the Republic of China (Taiwan) raised key rates by a modest 12.5 basis points, moving the benchmark discount rate to 1.375%. “Guiding market rates to normal levels is our main concern,” said central bank Governor Perng Fai-nan after announcing the rate hike. The decision comes as a surprise to many investors; with relatively high unemployment and concerns that euro zone woes could weigh on demand for electronics, many economists had been expecting rates to remain low until the third quarter at least. The move to raise interest rates in Taiwan may have been driven in part by Beijing’s announcement over the weekend that China would allow its currency to fluctuate more widely against the U.S. dollar. A stronger yuan [...]

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Three Tech-Heavy International ETFs

Eric Dutram — Tue, 08 Jun 2010 18:23:41 +0000

ETFs have become popular among all walks of investors in part because of the granularity of exposure available; U.S. investors are able to access nearly every corner of the world through a single security. Before the advent of country-specific ETFs, many investors spread out their portfolios around the globe through broad-based global funds or stock of large multinational corporations that had their shares listed on American exchanges. However, now investors can buy a wide variety of companies domiciled in a particular country easily and cheaply thanks to ETFs. Currently, there are well over 30 countries that have an ETF tracking their national market, with many more in the pipeline. While these ETFs have been instrumental in diversifying many investors portfolios in terms of geographic exposure, there are some nuances of which investors should be aware. The vast majority of these funds generally focus on one of three sectors; financials, industrial [...]

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IndexIQ Launches Small Cap Taiwan ETF (TWON)

Michael Johnston — Wed, 19 May 2010 14:36:08 +0000

IndexIQ announced on Tuesday the launch of the IQ Taiwan Small Cap ETF (TWON), the firm’s fourth product focusing on international small cap stocks. TWON will track the IQ Taiwan Small Cap Index, a cap-weighted benchmark that includes small cap companies domiciled and primarily listed on stock exchanges in Taiwan. The underlying index consists of approximately 100 securities with a weighted average market capitalization of less than $500 million. Like other funds offering exposure to Taiwan’s equity markets, TWON will have a heavy tilt towards tech firms; the technology sector makes up about 30% of assets, followed by industrials (28%) and materials (18%). Case For Taiwan Once one of the four “Asian Tigers,” Taiwan’s economy has continued to expand at an impressive rate in recent years. The economy may have expanded at its fastest rate in 20 years in the first quarter of 2010, fueled by strong exports and direct [...]

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Direxion Files For Non-Leveraged ETFs

Michael Johnston — Mon, 19 Apr 2010 22:43:44 +0000

Direxion, one of the leaders in the rapidly-expanding leveraged ETF space, has filed for approval on 36 new ETFs, including two non-leveraged products. The Direxion Auto Shares would seek to match the performance of the Indus Global Auto & Auto Suppliers Index, a benchmark that consists of approximately 30 companies engaged in the manufacturing, maintenance, or retailing of automobiles. This index is global in nature, and includes companies based in the U.S., Germany, India, Japan, and Sweden. If the proposed auto fund ultimately makes it to market, it would be the first ETF to focus exclusively on the automotive industry, eliminating one of the most glaring holes in the ETF coverage map (see Who Else Wants An Auto ETF?) The company also filed for the Direxion Airline Shares, an ETF that would track the Indus Global Airline & Airline Suppliers Index. This benchmark consists of 30 companies involved in the [...]

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China Small Cap ETF (HAO) Surges Ahead

Michael Johnston — Mon, 29 Mar 2010 18:57:22 +0000

In the wake of the most recent global economic downturn, there has been a monumental reshuffling atop the global totem pole. The emerging markets of the world have–well, emerged–as the clear leaders in a new global economy, returning to impressive growth rates as developed economies battle still-rising unemployment, deflation, fiscal crises, and a host of other economic roadblocks. China has seen its importance on the global economic stage surge, thanks to its status as one of the major trade partners of numerous countries. Developments from Beijing are now closely analyzed by investors around the globe, signaling departure from the U.S.-centric days of the past. China is now nipping at the heels of Japan for the title of the world’s second-largest economy, and most economists anticipate that it is only a matter of time before the U.S. is overtaken as well. As interest in investing in China has increased, so to [...]

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Five ETFs For An Asia-Centric World

Michael Johnston — Tue, 23 Feb 2010 17:08:54 +0000

Since the economic recovery began, many investors have looked to Asia to drive growth and stimulate global demand. China has grabbed most of the headlines, as tremendous growth in the world’s most populous nation has essentially pulled this emerging market into a tie with Japan as the world’s second-largest economy. In recent weeks, uncertainty over China’s next monetary policy moves caused turmoil in global equity markets, an indication of the influence that the country now holds over the global economy. This economic influence has perhaps translated into increased political clout as well: many global leaders, including president Obama, have been criticized for their reluctance to push China on issues such as human rights and currency devaluation. While China’s growth has been impressive, recent data releases have shown that Asia isn’t a one-trick pony. Taiwan and Thailand both recently reported their fastest economic growth in recent years, perhaps indicating that China’s [...]

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ETF Database » EWT

5 Things To Watch Out For In International Equity ETFs

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Three Tech-Heavy International ETFs

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