Newcomer Vident Launches International Equity ETF (VIDI)

by on November 1, 2013 | ETFs Mentioned:

Taper talks came into focus once again this week after the Federal Reserve gave somewhat of a positive outlook on the economy, leaving investors speculating when the central bank will begin tapering its bond purchases. Meanwhile, investors also weighed a slew of earnings reports this week from big name companies; ConocoPhillips (COP), Apple (AAPL), and Facebook (FB) all beat analysts’ expectations, while Exxon Mobil (XOM) posted better-than-expected Q3 profit and revenue, despite an 18% decline in profits [see How To Invest In 2013's Breakthrough Technologies].

On the ETF front, the industry saw only one new launch this week from a newcomer to the ETF space.

Georgia-based Vident Financial made its debut in the ETF world with its launch on Thursday:Global ETF

  • International Equity Fund (VIDI): This fund tracks the Vident International Equity Index, which combines principles-based country and securities selection with sophisticated risk management. Unlike traditional market cap weighted funds, VIDI selects its securities using a unique methodology that uses metrics like debt-to-GDP ratios, valuations, as well as country and company specific risk measurements to determine each holding’s weighting. Currently, the fund allocates roughly one-third of its assets to companies from emerging Asia, while stocks from developed Europe and developed Asia Pacific account for roughly half of the portfolio  [see Single Country ETFs: Everything Investors Need To Know]. 

Meet The Competition

Vident’s new fund will face some steep competition from other ex-U.S. funds in the Global Equities ETFdb Category. VIDI’s expense ratio of 0.75% falls toward the steeper end of the category, whose average expense ratio is 0.52%:

  • FTSE All-World ex US Index Fund (VEU, A): This fund is home to over $11 billion AUM
  • Total International Stock ETF (VXUS, A): Another popular option, this ETF charges only 16 basis points.
  • SPDR S&P World ex-US ETF (GWL, A): This fund is comprised of more than 700 individual holdings, though it focuses only on developed economies [see 101 ETF Lessons Every Financial Advisor Should Learn].
  • Core MSCI Total International Stock ETF (IXUS, A): Part of iShares’ “core” lineup, this fund offers exposure to more than 3300 international stocks.
  • International Quality Dividend Index Fund (IQDF, B+): This ETF focuses on high-quality, income-oriented international stocks, with an emphasis on long-term capital growth and a targeted overall volatility.
  • International Quality Dividend Defensive Index Fund (IQDE, A-): Similar to IQDF, this fund focuses on high quality dividend-paying securities, but focuses on low beta stocks.

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Disclosure: No positions at time of writing.