Market Overview

A Developed Markets Idea For Frugal Investors

A Developed Markets Idea For Frugal Investors
Related VEA
Taking A Broad Approach To Japan Exposure
International Exposure For Thrifty Investors

Investors are loving international equity exchange-traded funds this year. That well-documented theme is confirmed by the fact that five of the top 10 asset-gathering ETFs on a year-to-date basis track stocks from outside the U.S.

Moreover, nearly all of those five ETFs can be considered inexpensive, which is to say that while investors are flocking to ex-U.S. equities, they are doing so with costs on their minds. It can also be said that 2017 is proving to be fertile ground for ETF issuers to test the marketplace with new, low-cost, ex-U.S. fare.

That includes the iShares Core MSCI International Developed Markets ETF (NYSE: IDEV), which debuted in March. While IDEV is not yet five months old, making the fact that it hit a record high Tuesday less notable than with a seasoned ETF, it is worth noting that IDEV is off to a fast start.

Attracting Fans

IDEV is already gathering a following among investors. The ETF has accumulated nearly $66 million in assets under management since its March 21 debut. IDEV tracks the MSCI WORLD ex USA IMI Index, meaning the ETF is an alternative to funds that follow the widely followed MSCI EAFE Index.

The big difference between IDEV and funds tracking the MSCI EAFE Index is that that developed markets benchmark index does not hold Canadian stocks where as IDEV allocates 8.7 percent of its weight to Canada. That makes Canada the ETF's fourth-largest country weight and means IDEV is more comparable to an ETF like the Vanguard FTSE Developed Markets ETF (NYSE: VEA), which also features Canadian stocks.

IDEV's top three country weights are Japan, the U.K. and France. That trio combines for about 47 percent of the ETF's weight.

Already Impressing

IDEV is up 9.3 percent since coming to market, underscoring the point that 2017 is proving kind to international developed markets ETFs. Over the long-term, investors will benefit from IDEV's low fee. The ETF charges 0.07 percent annually, or $7 on a $10,000 stake, making it one of the most cost-effective international ETFs on the market.

The ETF allocates 22.1 percent of its weight to financial services stocks and a combined 26.3 percent to industrial and consumer discretionary names. Overall, IDEV holds 1,200 stocks.

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