U.S. One Launches First ETF

by on May 11, 2010 | ETFs Mentioned:

In perhaps a sign of things to come, a newcomer to the ETF industry has popped up, offering a fund-of-fund ETFs designed to offer exposure to global equity markets. The One Fund (ONEF) currently consists of five ETFs, including four Vanguard products and one iShares ETF:

  • Vanguard MSCI US Prime Market 750 Index (VV): 49.67%
  • Vanguard MSCI US Small Cap 1750 Index (VB): 20.22%
  • Vanguard MSCI EAFE Index (VEA): 20.03%
  • Vanguard MSCI Emerging Markets Index (VWO): 5.07%
  • iShares MSCI EAFE Small Cap Index Fund (SCZ): 5.01%

So about 70% of ONEF’s  holdings are in the U.S., with another 16% in Europe and 12% in Asia. The allocation to emerging markets is relatively small, coming in at just about 5% (see this interview for an interesting take on appropriate emerging markets allocations).

ONEF is being offered by U.S. One, a Reno-based firm making its initial foray into the ETF space. The One Fund offers investors a way to achieve the entirety of their equity exposure through a single security; the ETF’s fact sheet notes that investors can achieve access to more than 5,000 companies in the U.S. and around the world through ONEF. It’s also worth noting that the One Fund currently consists of relatively cheap ETFs; expense ratios range from 0.13% for VB to a still-modest 0.40% for SCZ, and the all-in expense ratio, including the pro-rata fees charged by the underlying holdings, is 0.51% (see The True Cost Of Active Management). As such, ONEF appears to be primarily geared towards buy-and-hold investors.

Although ETFs initially appealed to cost-conscious investors not known for high turnover in their portfolios, these vehicles have since been embraced by more active investors (see Five ETFs With Surprising Turnover).

See ONEF’s fact sheet here, and sign up for our free ETF newsletter for updates on all new ETF options.

Disclosure: No positions at time of writing.