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| Indexing
Goes Global - International Exchanges Embrace ETFs
IndexFunds.com Staff
June 17, 2003 |
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Increasing numbers of international investors have gained access
to low-cost passive funds through ETFs in recent years.
Although exchange-traded funds have experienced phenomenal growth
in the U.S., there are actually more ETFs trading on foreign exchanges
- 169 ETFs currently call an overseas exchange home, while 114
funds are listed on domestic U.S. exchanges. However, U.S.-listed
ETFs hold more than 70% of the $163 billion invested in ETFs,
according to industry research from State Street Global Advisors.
| Region |
Number of ETFs |
Total Assets ($) |
| USA |
114 |
118,546,650,056 |
| International |
169 |
44,808,480,058 |
| Total |
283 |
163,355,130,115 |
Source: State Street Global Advisors
The most anticipated upcoming ETF launch will take place in Australia
- Gold Bullion Ltd. has developed an ETF where investors can "trade"
in gold bullion on the Australian Stock Exchange (ASX). The new
fund is stirring debate over whether it will make gold so easy
to own that a flood of new retail investors will send the precious
metal skyward.
Barclays Global Investors introduced the first U.S. bond ETFs
in Europe earlier this year in May on the London Stock Exchange.
The iShares Goldman Sachs $ InvesTop Corporate Bond will track
an index with 100 U.S. investment-grade corporate bonds.
Europe is the home for most international ETFs, and many are
listed on Euronext, a joint venture of exchanges in Amsterdam,
Brussels, and Paris.
An ETF based on the FTSEurofirst 80 index is to be launched by
Lyxor Asset Management on Euronext in September. It will be the
first ETF based on an FTSEurofirst index, newly created in co-operation
by Euronext and index provider FTSE Group. The new ETF will track
an index covering the Eurozone.
The fund will be listed on NextTrack, the Euronext segment dedicated
to ETFs. It currently hosts 63 ETFs based on 55 different underlying
indexes. NextTrack trading activity is on the rise, with the number
of transactions on ETFs up 107% year-to-date compared to last
year, according to the exchange.
In Asia, Dow Jones Indexes introduced a new benchmark for blue-chip
companies headquartered in Hong Kong, Singapore, South Korea and
Taiwan. Dow Jones said it is attempting to license the index for
use as the basis of ETFs or derivatives.
"With the launch of the Dow Jones Tiger Titans 50, Dow Jones
Indexes becomes the first index provider to cover the Asian Tiger
markets with a blue-chip index," said Lars Hamich, executive director
of global business development. "The four markets included in
the index are fast-growing economies with competitive returns
in recent years, which makes the index an appealing tool for financial
institutions."
The table below lists all international ETF players and their
respective industry market share.
| International ETF Managers |
# of Funds |
Assets ($) |
| AXA Gestion |
12 |
393,882,965 |
| Benchmark Asset Mgt Co |
2 |
2,169,945 |
| Barclays Global Investors |
31 |
6,620,859,885 |
| Bank of NY |
1 |
38,851,848 |
| Credit Lyonnais |
2 |
514,901,880 |
| Credit Suisse |
5 |
1,585,519,695 |
| Daiwa Asset Mgmt. |
6 |
1,519,156,443 |
| IndexChange |
32 |
3,802,073,065 |
| IndexCO |
3 |
467,517,761 |
| Merrill Lynch |
2 |
2,167,501,824 |
| Nikko Asset Mgmt. |
2 |
8,223,591,473 |
| Nomura Asset Mgmt. |
7 |
9,923,428,571 |
| Ofek Leumi |
1 |
445,490,242 |
| OM Group |
1 |
125,339,776 |
| Seligson |
1 |
24,850,394 |
| Merrill Lynch & Societe Generale LDRs |
13 |
158,282,688 |
| Societe Generale |
5 |
2,979,269,907 |
| State Street Global Advisors |
21 |
4,684,390,417 |
| TD Securities |
4 |
183,728,517 |
| UBS Asset Management Limited |
11 |
483,530,320 |
| CJ Investment Trust |
1 |
11,542,289 |
| Korea Investment Trust |
1 |
15,679,104 |
| Prudential ICICI |
1 |
4,060,907 |
| Samsung Investment Trust |
1 |
306,343,284 |
| NextTrack Plc |
2 |
96,739,864 |
| Gold Bullion Ltd. |
1 |
29,776,994 |
| Totals: |
169 |
44,808,480,058 |
Source: State Street Global Advisors
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