From the October 2008 issue of Research Magazine • Subscribe!

SPDRs Target International Sectors

State Street Global has unveiled 10 new SPDR exchange-traded funds. The new set of ETFs provides exposure to international industry sectors. Each ETF is linked to an industry sub-index of the S&P/Citigroup World ex U.S. Broad Market Index.

The respective indexes hold between 70 and 1,300 securities from the following sectors: consumer discretionary, consumer staples, energy, financials, health care, industrials, materials, technology, telecommunications and utilities. The expense ratio for all 10 ETFs is one-half percent.

The country exposure of each ETF varies. For example, the SPDR S&P International Energy Sector ETF (IPW) has a 53 percent exposure to the U.K. and Canada, whereas the SPDR S&P International Consumer Discretionary Sector ETF (IPD) has a 36 percent weighting in just Japan.

In contrast, the SPDR S&P International Technology Sector ETF (IPK), with 45 percent, has even more exposure to Japan. The SPDR S&P International Financial Sector ETF (IPF) is less concentrated and has a 36 percent weighting in Japan, the U.K. and Canada.

Until now, New York-based WisdomTree was the only company to offer a complete suite of international sector ETFs.

While the SPDR components consist of passively selected securities (part of the broad market umbrella index) that are weighted by market capitalization (free float), the WisdomTree constituents are screened to include only dividend-paying companies and are weighted based on the component's regular cash dividend.

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Ron DeLegge is the San Diego-based editor of www.etfguide.com.

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