Posted by: Aaron Pressman on November 14, 2006
Thanks to Roger Nusbaum, I see that WisdomTree has filed to introduce another 31 exchange-traded funds. There are some interesting ideas here, including an international real estate fund and dividend-oriented funds for regions and countries - let’s dig in and see how they’ll be implemented…
One critical point at the outset: the filing doesn’t list what the fees will be on the new funds. That could be a make or break factor for many investors. Also of note, the filing includes no historical performance for the underlying indexes and they’re not yet listed on WisdomTree’s web site.
As with some of the competing non-traditional index fund sponsors, WisdomTree’s twist in this filing is to create indexes that don’t weight the included stocks by market cap. Instead, stocks are weighted either by earnings or dividend yield.
Thankfully, the international indexes will be truly international. Unlike some competing funds, such as the Powershares India Tiger fund, for example, these new funds will be comprised of stocks actually trading on overseas markets. They won’t be limited to U.S.-traded shares or American Depositary Receipts. Buy the new China fund and you’ll get “companies that are incorporated and listed on a major stock exchange in China.” Buy the India fund and you’ll get “companies that are incorporated and listed on a major stock exchange in India.”
So if the funds get approved by the SEC, this would mark the first true Indian ETF listed in the U.S. (I blogged a little about a foreign listed Indian ETF back in September). That should give U.S. investors simple and inexpensive access to real Indian stocks that will performa as the Indian market performs. Or as Willie Wonka once said: “Lick a pineapple, it tastes like pineapple…The strawberries taste like strawberries. The snozzberries taste like snozzberries!”