State Street Global has introduced 10 new international exchange-traded funds. The new set of funds 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 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.
According to the prospectus, the expense ratio for all 10 ETFs is 0.50 percent. (See list below.)
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 UK and Canada, while the SPDR S&P International Consumer Discretionary Sector ETF (IPD) has a 36 percent weighting in Japan. The SPDR S&P International Financial Sector ETF (IPF) is less concentrated and offers more diversification, with a 36 percent weighting in Japan, the UK and Canada (combined).
Unlike global-industry sector funds, these international funds exclude market exposure to U.S. stocks. And until now, WisdomTree was the only company to offer a complete suite of international sector ETFs.
The underlying indexes behind the new SPDRs consist of passively selected stocks that are weighted by market capitalization (free float). This approach attempts to replicate market performance.
In contrast, WisdomTree’s sector funds aim to beat the market by screening for dividend-paying companies and weighting them based on cash dividends.
The new SPDR international ETFs are:SPDR S&P International Consumer Discretionary Sector ETF (IPD)SPDR S&P International Consumer Staples Sector ETF (IPS)SPDR S&P International Financial Sector ETF (IPF)SPDR S&P International Health Care Sector ETF (IRY)SPDR S&P International Industrial Sector ETF (IPN)SPDR S&P International Materials Sector ETF (IRV)SPDR S&P International Technology Sector ETF (IPK)SPDR S&P International Telecommunications Sector ETF (IST)SPDRS&P International Utilities Sector ETF (IPU)SPDR S&P International Energy Sector ETF (IPW)
Ron DeLegge is the San Diego-based editor of www.etfguide.com.