Market Overview

A Look At A New Small-Cap ETF


Hardly a day has gone by over the past couple of weeks where BlackRock's (NYSE: BLK) iShares outfit has not introduced a new ETF so please forgive the ETF Professor for forgetting about the iShares MSCI All Country Asia ex Japan Small Cap Index Fund (Nasdaq: AXJS).

The small-cap answer to the iShares MSCI All Country Asia ex Japan Index Fund (Nasdaq: AAXJ), AXJS would appear to be a good idea for at least two reasons. First, many international small-cap ETFs have found success in terms of raking in investor assets. Second, the iShares MSCI All Country Asia ex Japan Index Fund is popular itself with average daily volume of nearly 500,000 shares and almost $2.4 billion in AUM.

AXJS is off to a fine start considering its inception date is February 2, 2012. In less than a full week of trading, the ETF has pulled in almost $11.3 million in AUM. Home to 821 stocks, AXJS has an expense ratio of 0.75%, which is slightly more than 0.67% charged by its large-cap counterpart.

AAXJ is dominated by three sectors as financials, technology and industrials account for about 58% of that ETF's weight. AXJS offers double-digit exposure to financials, technology, consumer discretionary, industrials and materials names.

With different weights, the country lineup in AXJS is similar to what is found in AAXJ. The new small-cap offering devotes 40% of its weight to Taiwan and South Korea, par for the course with many multi-country ETFs. China and Hong Kong combine for another 27% of the fund's weight while Singapore, India, Malaysia, Indonesia and Thailand also figure into the equation.

With the addition of AXJS, iShares now offers three Asia ex-Japan. The iShares MSCI Pacific ex-Japan (NYSE: EPP) is the other and it should be noted this particular is not without competition as PowerShares, WisdomTree and First Trust also sponsor Asia ex-Japan funds.

Posted-In: Long Ideas News Short Ideas Specialty ETFs New ETFs Small Cap Analysis Emerging Market ETFs Small Cap


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