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ETF Watch: June 7-25
By Matt Hougan | June 27, 2007

Related ETFs: BIK / EEB / EEM / EFA / EWJ / FVL / GKA / GKB / GKC / GKD / GKE / HHP / HHT / HHU / IDV / IVV / IWD / IWF / KLD / LVL / MDY / OIL / PAF / PBD / PEF / PEH / PFA / PIO / PJO / PUA / PXF / QQQQ / SPY / VEA / YYY

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NEW LISTINGS

SPDR BRIC

State Street Global Advisors (SSgA) launched a new BRIC (Brazil, Russia, India, China) exchange-traded fund (ETF) onto the American Stock Exchange (AMEX) on June 22. The SPDR S&P BRIC 40 ETF (AMEX: BIK) tracks a float-adjusted, market capitalization weighted index of 40 countries from those “hot hot” countries. BIK charges 40 basis points (0.40%) in expenses.

The fund isn’t the first BRIC ETF in the U.S. That honor goes to the Claymore/BNY BRIC ETF (AMEX: EEB), which launched in September 2006 and holds 75 American Depository Receipts (ADRs), or shares of foreign companies that trade on the U.S. market. EEB charges 0.60%, and has attracted over $270 million in assets since inception.

The two products offer very different exposure to the BRIC block, including huge differences in country exposure.
IndexUniverse.com’s full coverage and analysis of BIK is available here.

The prospectus is available here.

First Trust Conversion

First Trust Advisors has done it again. Effective June 15, the firm completed the second-ever transition of a closed-end fund into an exchange-traded fund. The First Trust Value Line (closed-end) Fund has been reorganized as the First Trust Value Line 100 Exchange-Traded Fund (FVL). FVL was an actively managed fund, but one with a highly quantitative strategy; the new ETF tracks the Value Line 100 Index. The expense ratio for the fund has dropped from 0.97% to 0.70%.

Jeff Margolin, vice president at First Trust, said that the move was taken to close the discount valuation gap for the fund.

IndexUniverse.com’s full coverage is available here.

The prospectus is available here.

PowerShares Goes International

PowerShares further expanded its lineup of international ETFs last week with the launch of five new products on the AMEX. The funds each charge an (eye-popping) 0.75% expense ratio, among the highest expense ratio ever for non-leveraged equity ETFs.

Three of the ETFs track broad-based international indexes designed by consulting firm Quantitative Strategies Group. These quant-focused funds use a variety of factors―balance sheet strength, capital structure, leverage, earnings growth, earnings quality and price momentum―in an attempt to identify stocks that will outperform the market. They are:

PowerShares Dynamic Developed International Opportunities Portfolio (AMEX: PFA), tracking the same market as the MSCI EAFE
PowerShares Dynamic Asia Pacific Portfolio (AMEX: PUA)
Power Shares Dynamic Europe Portfolio (AMEX: PEH)

In addition, PowerShares launched two global funds:

PowerShares Global Clean Energy Portfolio (AMEX: PBD)
PowerShares Global Water Portfolio (AMEX: PIO)

See IndexUniverse.com’s full coverage here.

Read the prospectus for the funds here.

PowerShares Gets RAFI

PowerShares didn’t stop there, either: Continuing its push into the international marketplace, PowerShares launched four international ETFs tied to the FTSE RAFI lineup of alternatively weighted indexes.

The FTSE RAFI indexes follow what they call a “fundamental indexing” strategy. In practice, that means that they weight components based on four quantitative factors: book value, earnings, sales and dividends. FTSE RAFI maintains that this strategy will outperform traditional cap-weighted indexes by not overweighting overvalued stocks and underweighting undervalued stocks.

The new funds cover four of the five big categories in international investing, and are the: