The New SPDR International ETFs Are Top-Heavy

The new series of ten international sector SPDR ETFs are positioned to compete with WisdomTree's line of dividend-weighted sector ETFs. It looks like these ETFs are based on the Citigroup/S&P global sector indexes with the U.S. companies stripped out.

Here is a list of the new SPDR ETFs:

SPDR S&P International Consumer Discretionary Sector ETF (IPD)
SPDR S&P International Consumer Staples Sector ETF (IPS)
SPDR S&P International Energy Sector ETF (IPW)
SPDR S&P International Financial Sector ETF (IPF)
SPDR S&P International Health Care Sector ETF(IRY)
SPDR S&P International Industrial Sector ETF (IPN)
SPDR S&P International Materials Sector ETF (IRV)
SPDR S&P International Technology Sector ETF (IPK)
SPDR S&P International Telecommunications Sector ETF (IST)
SPDR S&P International Utilities Sector ETF (IPU)

It is interesting to look inside some of these ETFs and look at the country weightings.

Energy (IPW)

28% United Kingdom
25% Canada
11% France
9% Italy
8% Norway

Top 5 countries=81%

Financials (IPF)

14% Japan
12% United Kingdom
9% Canada
7% France
7% Australia

Top five countries= 50%

Materials (IRV)

18% United Kingdom
15% Japan
14% Australia
13% Canada
11% Germany

Top five countries=70%

You can see that 5-6 countries dominate the holdings of these ETFs since they are market cap based, similar to the EFA index which has 65% exposure to Japan, UK, Germany and France. If you are looking for significant exposure to emerging markets, these ETFs won't get the job done. I would love to see these sector ETFs with countries equally weighted.