International ETF Assets Doubled Over Past Year To Nearly $83 Billion
August 14, 2006
Exchange-traded funds focused on international holdings continue to take the investment world by storm. In the past 12 months, total ETF assets rose 38% to $335.1 billion, while global ETFs almost doubled to $82.8 billion, according to the Investment Company Institute.
With low expense ratios-about 0.53%, compared to 1.68% for international mutual funds-and greater liquidity, international ETFs have become the vehicle of choice for those who hope to protect a portion of their portfolios from the ups and downs of U.S. markets, by investing abroad.
International ETFs represent about 26% of all money invested in U.S.-based funds, compared to 21% for long-term mutual funds that invest in companies abroad.
Bill Donoghue, a financial adviser and president of W.E. Donoghue, told The Wall Street Journal his firm began using Fidelity international mutual funds to help diversify clients' portfolios, but switched to ETFs in the past five years to take advantage of the ability to trade actively.
Today, investors can choose from 63 different global equity funds, in addition to several other single-country funds that allow investors to choose countries like Malaysia, without having to scout for individual companies there to invest in. But some investment advisers recommend broader international ETFs, rather than single-country funds.
(c) 2006 Money Management Executive and SourceMedia, Inc. All Rights Reserved.