Six New ETF Choices in Emerging Markets

For the first time in a while investors have some new choices for emerging-market ETFs. Last Friday StateStreet launched six ETFs as part of the SPDR product line:

• SPDR S&P China(GXC)
• SPDR S&P Emerging Europe(GUR)
• SPDR S&P Latin America(GML)
• SPDR S&P Emerging Market(GMM)
• SPDR S&P Emerging Middle East & Africa(GAF)
• SPDR S&P Emerging Asia Pacific(GMF)

I'm taking a quick first look at all of these just out of the gate to give those of you with an interest in emerging market investment products a head start on your research. A couple of these probably will turn out to be better mousetraps, most likely GMM and GUR, but as a general rule of thumb I'd give these a couple of months or so to start to prove themselves.

A good place to start your assessment of any fund is its expense ratio, and for all these it's 0.60%. For now there is no dividend information available, but the methodology for composition is by market cap rather than dividend or some other "fundamental" measure.

The Price of China Exposure

The GXC compares, not surprisingly, to iShares FTSE/Xinhua China 25 Index Fund(FXI). These two funds are very similar in terms of sector weighting, stocks held and the weighting of the stocks held. The biggest difference I can see is the expense, and even there the difference isn't dramatic; GXC charges 60 basis points and FXI charges 74 basis points.

While I would not sell FXI to buy GXC (and incur a tax hit in order to save 14 basis points), once GXC has a little bit of a track record to look at, if they turn out to be as similar as I think they will, well, cheaper's usually better.