4 "Ex" ETFs Your Broker Forgot to Mention (DTN, AXEN, FDT)
Sometimes, knowing what you don't want in an ETF is as important and useful as knowing what you do want. To that end, we previously examined some country funds sporting the ex-U.S. or ex-Japan labels.
Inspired by a recent piece on "ex" ETFs by MarketWatch we decided to revisit the ex ETF concept to see if they are some funds using exclusionary practices that are flying under the radar, but that are also worth considering.
Here are four to mull over.
WisdomTree Dividend ex-Financials Fund (NYSE: DTN) Highlighted in the MarketWatch piece, the WisdomTree Dividend ex-Financials Fund is hard to dub as "under the radar" because it's home to almost $1.3 billion in assets under management and average daily volume is decent at 200,000 shares.
Looking at things from long-term perspective, DTN is certainly worthy of praise over the past five years. Obviously, financials have been slammed in over that time, but DTN is down less than 10%. That compares to a 56.4% plunge for the Financial Select Sector SPDR (NYSE: XLF). The bad news is that when bank stocks rally, DTN will predictably be left behind. Year-to-date, XLF has offered more than triple the returns of DTN.
WisdomTree Global ex-US Growth Fund (NYSE: DNL) Nearly six years old, the WisdomTree Global ex-US Growth Fund doesn't come right out and say it, but it appears to be an ETF built on the premise that markets outside of the U.S. will offer superior growth rates in the years ahead. That's a valid argument and certainly not a bad idea for an ETF.
The knock on DNL is more than a quarter of its weight is devoted to the U.K., which is arguably in a recession right now. The other issue is that over 13% of DNL's weight is allocated to Euro Zone countries. In fact all of the PIIGS except Greece receive at least modest weights in this ETF.
Yes, DNL is an ex-U.S. ETF, but in terms of growth prospects, we'd like to see more Philippines, Thailand and related fare than embattled European countries.
iShares MSCI ACWI ex US Energy Sector Index Fund (NYSE: AXEN) Tired of the same old boring ways of accessing big oil stocks through ETFs such as the Energy Select Sector SPDR (NYSE: XLE)? Or maybe you just want to get involved with Royal Dutch Shell (NYSE: RDS-A) and BP (NYSE: BP) through one ETF. The iShares MSCI ACWI ex US Energy Sector Index Fund is useful on both fronts.
The good news with AXEN is that it has outperformed XLE this year. The bad news is the ETF is thinly traded, so it's subject to wide bid/ask spreads and if it can't find support at its 200-day moving average, more downside is on the way.
First Trust Developed Markets Ex-US AlphaDEX Fund (NYSE: FDT) Just a few days shy of its first birthday, the First Trust Developed Markets Ex-US AlphaDEX makes no bones about the fact that focuses exclusively on developed markets. Those not willing to be on Japanese stocks as value proposition should probably steer clear of FDT because Japan accounts for almost 26% of the fund's country weight. Even though FDT doesn't garner a lot of press, the fund is up almost 5.7% year-to-date and it has raked in nearly $48 million in AUM since inception.
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