Over 200 exchange-traded products have come to market this year, indicating the competition for investors' assets is growing more intense. So, any time a new exchange-traded fund can rapidly clear superficial hurdles, such as gaining $100 million in assets under management, that is an advantage for that rookie fund.
Such as, advantage to the PowerShares FTSE International Low Beta Equal Weight (NASDAQ: IDLB), an ETF that has needed just a month to amass nearly $114 million in assets under management.
So prolific has IDLB been at gathering assets since debuting last month that the PowerShares DB US Dollar Index Bullish (NYSE:UUP) is the only PowerShares ETF that has seen greater inflows over that period.
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The Fund And The Index
IDLB follows the FTSE Developed ex-US Low Beta Equal Weight Index. Japan dominates the new ETF with a weight of 34.3 percent. No other country exceeds 7.8 percent in IDLB's lineup. IDLB, which holds nearly 800 stocks, devotes over 40 percent of its combined weight to industrial and financial services stocks.
Other significant country allocations in IDLB include a 7.7 percent weight to the UK and a 6.5 weight to Australian stocks. South Korea, Asia's fourth-largest economy, is 5.7 percent of IDLB's weight. FTSE Russell does not classify South Korea as an emerging market as some rival index providers do. Regardless of market classification, IDLB's exposure to South Korean stocks could prove beneficial.
The South Korean Advantage
While South Korea's major conglomerates, also known as chaebols, have historically been stingy when it comes to dividends, they are also among the most cash-rich companies in Asia. Bolstering the potential of South Korea ETFs to become dividend growth destinations in the future is the government's newfound involvement in pressuring the chaebols to part with some of their cash in the form of shareholder rewards.
As minority investors outrage gained momentum, tightly controlled chaebols were dissuaded from the continued hoarding practices through the introduction of a profits tax. Implemented by the Korean government in 2014, the measure saw headline dividends grow by 16.2 percent in the same year, said Markit in a recent note.
The success of the newly minted IDLB, which also makes the ETF one of the most thriving rookie ETFs of 2015, extends the themes of investors' preference for developed market equities and low volatility funds.
For example, the PowerShares Exchange-Traded Fund Trust II (NYSE:SPLV) has added nearly $269.5 million in new assets in just the past 90 days.
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