Northern Trust Single Country ETFs to Challenge iShares Domination

By Murray Coleman

After giving notice last winter that it planned to enter the exchange-traded funds market, Chicago-based financial services giant Northern Trust (NASDAQ: NTRS) has set plans to launch Wednesday its first wave of funds.

The bank's asset management arm, Northern Trust Global Investments, is likely to take an even more aggressive course in coming months as it readies to bring at least 25 more ETFs to market.

At least initially, NTGI will start with a set of six. The opening two will focus on the U.K. and Australia. Those are expected to be followed around Monday by a German-focused ETF. Then, on or near April 16, a trio providing exposure to major exchanges in Japan, France and Hong Kong are due to launch.

NTGI officials declined to comment on their plans until after the first set of ETFs are all trading.

Not included in that group are two global stock ETFs, which at the time of NTGI's filing were the first of their kind. Last week, despite starting later, Barclays Global Investments and the Vanguard Group jumped into the fray and beat Northern Trust to the punch.

Northern Trust has elected to dip its feet in the water with a series of essentially single-country ETFs. All will go under the Northern Exchange-Traded Shares banner, or NETS. And they'll each have an expense ratio of 0.47%.

The NETS FTSE 100 Index Fund (AMEX: LDN) appears ready to open Wednesday. It will invest in the largest companies by market-cap size in the London Stock Exchange. It represents roughly 80% of the LSE's market cap. The FTSE 100 is the most widely followed benchmark for the U.K. market.

Also set to launch on the same day is the NETS S&P/ASX 200 Index Fund (AMEX: AUS). It will compete against the iShares MSCI Australia Index (NYSE: EWA), which is priced at 0.51%. One of the oldest international ETFs on the market, EWA has attracted $1.4 billion in assets since launching some 12 years ago. Financials and Materials make up slightly more than 68% of its portfolio.

LDN will open against another entrenched BGI competitor, the iShares MSCI UK Index (NYSE: EWU). Both EWA and EWU opened at the same time in March 1996. The U.K. fund now has $1.15 billion in assets and charges the same 0.51% expense ratio.

Northern Trust has created a Web site for its NETS series at http://www.netsetfs.com/. According to the site, four more ETFs are coming:

• The NETS DAX Index Fund (AMEX: DAX) to track Germany's major exchange.
• The NETS TOPIX Index Fund (AMEX: TYI) to provide coverage of Japan.
• The NETS CAC-40 Index Fund (AMEX: FRC) to track France's market.
• The NETS Hang Seng Index Fund (AMEX: HKG) to follow Hong Kong stocks.

Absent from the list, which includes ticker symbols, are either the Dow Jones Wilshire Global Total Market or FTSE CNBC Global 300 funds.

Stay tuned ...

• More on Single Country Europe ETFs and Closed-End Funds

Comments

[Yazz]

I'm hoping to see more equal weighted single country ETFs.