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Barclays Global Investors launches eight new international iShares ETFs

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Barclays Global Investors, the world’s largest provider of exchange-traded funds, has launched eight new iShares international ETFs that provide exposure to global real estate, small cap s

Barclays Global Investors, the world’s largest provider of exchange-traded funds, has launched eight new iShares international ETFs that provide exposure to global real estate, small cap stocks in developed countries, Asia, and emerging markets, including the first five iShares funds to be listed on Nasdaq. A further three funds are listed on the NYSE Arca electronic trading platform.

The ETFs listed on Nasdaq, all based on FTSE or FTSE EPRA/Nareit indices, are the iShares FTSE Developed Small Cap ex-North America Index Fund, iShares FTSE EPRA/Nareit Global Real Estate ex-U.S. Index Fund, iShares FTSE EPRA/Nareit Asia Index Fund, iShares FTSE EPRA/Nareit Europe Index Fund and iShares FTSE EPRA/Nareit North America Index Fund. The small-cap fund as an expense ratio of 50 basis points and the EPRA/Nareit funds each have a ratio of 48 bps.

The three NYSE Arca ETFs are the iShares S&P Asia 50 Index Fund, which has an expense ratio of 50 basis points, the iShares MSCI BRIC Index Fund (75 bps) and the iShares MSCI Chile Index Fund (74 bps).

‘We offer the broadest set of international ETFs because we recognise the hurdles that investors face with international investing,’ says Noel Archard, head of US iShares product development. ‘This is particularly the case with investing in emerging markets, international sectors and small cap securities. We are excited to bring investors eight new iShares international funds that are cost effective, tradable investment vehicles.’

Michael Latham, head of iShares Americas, says: ‘BGI continues to work with leading exchanges around the world to bring innovative investment products to the marketplace. We are pleased today to extend our relationship with Nasdaq by listing the first iShares funds on Nasdaq’s new ETF Market.’

The five iShares ETFs are the first new exchange-traded funds to list on Nasdaq since the launch in October of the Nasdaq ETF Market, which is aimed at supporting ETFs and index-linked notes during their incubation period.

‘These new iShares ETFs will benefit from an innovative market structure designed specifically to promote the growth of ETFs during their incubation period,’ says Nasdaq president and chief executive Robert Greifeld. ‘These ETFs will provide investors with instant, diversified exposure to a range of investment opportunities in a Nasdaq environment characterised by deep liquidity, speed, and unparalleled transparency.’

Nasdaq claims to offer the most liquid US market for ETFs, capturing 37.9 per cent of all ETF trading volume in October, a new monthly record. Matched volume was 6.6 billion, more than any other US exchange.

The focus of the Nasdaq ETF Market is the designated liquidity provider, a market-maker selected to maintain liquidity in qualified ETFs. Designated liquidity providers are required to maintain a higher standard of market quality measured by spread, depth, and time quoting at or near the national best bid and offer. They receive price incentives to support ETFs during their period of initial listing, when funds need to develop more active trading.

Designated liquidity providers are selected by Nasdaq based on factors including experience with making markets in ETFs and index-linked notes, adequacy of capital, willingness to promote Nasdaq as a marketplace, issuer preference, operational capacity, support personnel, and history of adherence to Nasdaq rules and securities laws.

The ETF Market allows the traditional floor-based specialist, which has historically provided initial liquidity to new ETFs, to play a similar role by placing two-sided quotes in the Nasdaq Market Center. This enables sponsors to retain the ability to develop preferred relationships with intermediaries.

ETF issuers may choose a single designated liquidity provider or several competing providers. This flexible structure enables issuers and traders to interact depending on the needs of the issuer as they vary throughout the fund’s life cycle.

Nasdaq is an index calculator and designer responsible for some of the world’s most popular ETFs, including PowerShares QQQ, one of the most heavily traded listed equity securities in the US and one of the most actively traded ETFs in the world. PowerShares QQQ tracks the Nasdaq 100 Index, which is used as the basis of more than 500 investment products in some 36 countries.

Barclays Global Investors, a majority-owned subsidiary of the UK’s Barclays Bank, is one of the world’s providers of structured investment strategies such as risk-controlled active strategies and indexing and is a global leader in ETF assets and product numbers through the iShares brand, which accounts for more than 190 ETFs worldwide.

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