Barclays Global Investors (Barclays) has launched two new exchange-traded funds (ETF), providing investors with exposure to the Brazil, Russia, India and China (BRIC) story and separately, to Asia’s biggest companies.
The first is the iShares MSCI BRIC ETF, which bases its strategy on the strong growth in the BRIC countries, and tracks the performance of the MSCI BRIC Index of over 150 companies.
Energy and financials are the biggest sectors in that index, and the biggest stocks are Russian utility giant OAO Gazprom (8.55 per cent), Brazilian oil company Petrobras (5.68 per cent) and telecom titan China Mobile (5.17 per cent).
The second ETF, the iShares S&P Asia 50, is made up of the continent’s largest companies, with Korea and Taiwanese-based companies accounting for almost half the fund.
Korean manufacturing conglomerate Samsung Electronics makes up 8.67 per cent of that index, followed by China Mobile (7.64 per cent) and Taiwan Semiconductor (6.16 per cent).
The ETFs listed at around $45 on the Australian Securities Exchange (ASX) yesterday, and trade in exactly the same way as stocks and include dividends.
The fees for the products are built into their share price, iShares S&P Asia 50 charges 0.50 per cent while iShare MSCI BRIC costs 0.75 per cent.
ETFs are becoming more popular in diversified portfolios for financial planning clients, self-managed superannuation funds (SMSF) and separately managed accounts (SMA), according to Barclays.
Barclays now offers 16 ETFs in Australia.
