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A Big Move Into A New Ex-U.S. ETF

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A Big Move Into A New Ex-U.S. ETF

Investors' well-documented affinity for ex-U.S. developed markets exchange traded funds (ETFs) this year is not limited to established funds. The iShares Core MSCI International Developed Markets ETF (NYSEARCA:IDEV) debuted in March and is off to a stellar start.

 

Since its March debut, IDEV has been one of this year's more successful new equity ETFs, but the fund's stellar start has gotten a big boost in recent days. For the week ending Nov. 1, IDEV took in nearly $617 million in new assets, a total surpassed by just four other ETFs over that period. 

 

IDEV had $713.3 million in assets under management as of Nov. 1, meaning the ETF needed barely more than eight months of work to hit that level.

 

Good Timing

 

Not all new ETFs have the benefit of good timing. IDEV certainly did. The ETF came to market at a time when investors were displaying an overt preference for low-cost exposure to ex-U.S. developed markets, a theme that has been prevalent for the bulk of this year.

 

Three of the top 10 asset-gathering ETFs — including two of the top three — on a year-to-date basis are inexpensive funds tracking stocks in developed markets outside the U.S. This underscores the point that IDEV was well-timed to the community of low-cost international equity ETFs.

 

IDEV charges just 0.07 percent per year, or $7 on a $10,000 investment, making it one of the least expensive international equity ETFs on the market today.

 

More Details

 

IDEV holds over 1,200 stocks and tracks the MSCI WORLD ex USA IMI Index. That index is different from the widely followed MSCI EAFE Index in that IDEV's benchmark features exposure to Canada, whereas the MSCI EAFE Index does not. Canada is IDEV's fourth-largest geographic allocation, at a weight of almost 8.7 percent.

 

Japan and the U.K. combine for nearly 39 percent of IDEV's weight. IDEV features exposure to six Eurozone nations, led by a combined weight of 17.4 percent to France and Germany.

 

IDEV's largest sector weight is 21.3 percent to financial services. Industrial and consumer discretionary names combine for over 27 percent of the rookie ETF's lineup. IDEV is up 13.5 percent since coming to market, which slightly trails the MSCI EAFE Index over that period.

 

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