Northern Trust Launches NETS for Israel, Portugal

By Heather Bell

Two more of Northern Trust's NETS exchange-traded funds launched on Tuesday. The NETS TA-25 Index Fund (NYSE: TAV) tracks the flagship index of Israel's Tel-Aviv Stock Exchange; the index includes the largest 25 stocks by market capitalization. The NETS PSI-20 Index Fund (NYSE: LIS) is tied to the Euronext Lisbon exchange's index of the largest and most liquid stocks trading on its main market.

There is no other U.S.-listed ETF tracking the Portuguese market; in this case, rather than offering an alternative to the somewhat monopolistic iShares country ETFs, the NETS product is the only alternative. Of course, there is the question of how many investors will be lining up to invest in Portugal, which is a small market that does not normally receive a lot of attention from investors or the media (although this may be part of its appeal, too). LIS charges an expense ratio of 0.47%.

TAV, however, is not the first of its kind. The iShares complex already offers the competing iShares MSCI Israel Capped Investable Market Index Fund (NYSE Arca: EIS), which charges 0.68%. In a departure for the NETS family, TAV is actually more expensive than its corresponding iShares ETF: It charges 0.70%. EIS was only launched in late March, so it hasn't had time to gain much of a foothold - Northern Trust may be looking to compete with it more on the basis of the underlying index than on price.

There are currently 14 NETS listed on either the NYSE or the American Stock Exchange. The NETS ISEQ 20 Index Fund, tied to the Irish stock market's blue-chip index, is supposed to be the next to launch, on or around June 18, according to the NETS prospectus.

Read the prospectus for the NETS ETFs here.

• More on choosing the right ETF

Comments

[Lisa:]

It's very odd that Northern Trust launched the Israel ETF with a higher expense ratio than the iShares ETF, given that the iShares ETF already has first mover advantage.

2008 May 28 04:34 AM

[kurt walter:]

We need short index ETFs too

2008 May 28 12:33 PM

[bigmig:]

I think Northern was right in a higher expense ratio considering the basket that they will be reflecting which does not include ADR's and subsequently gives you a better return tied to Israel as the Ishares does not do this. Mostly invested heavily in ADR's and Healthcare sector.

2008 May 28 01:42 PM