The trend of rules-based or factor in vesting has already invaded domestic equity ETFs and now it’s spreading into international markets.
In mid-September, State Street Global Advisors (SSGA), manager of the SPDR ETFs, unveiled the following trio of single-country ETFs: SPDR MSCI Mexico Quality Mix ETF (QMEX), SPDR MSCI South Korea Quality Mix ETF (QKOR) and SPDR MSCI Taiwan Quality Mix ETF (QTWN).
The funds are linked to MSCI indexes that screen companies based upon quality, value and low volatility. “A ‘quality’ style of investing emphasizes companies with high returns, stable earnings, and low financial leverage,” noted the SPDR website.
The idea is to give investors improved risk-adjusted return potential when investing in single-country markets.