New ETFs make the most of strong global markets

What's new

Making the most of strong global sharemarkets are four new international exchange traded funds.

Around 70% of new ETF money is going into global funds and these four offer diversification across regions and countries as well as low-cost access to rising equity markets.

There are two emerging market ETFs: the Vanguard FTSE Emerging Markets Shares ETF (VGE) invests in 22 markets including Asia, South America, Europe, Africa and the Middle East while the SPDR S&P Emerging Markets Fund (WEMG) invests in China, South America and Asia.

For investors focused on yield, there are two income-based global ETFs: the SPDR Dow Jones Global Real Estate Fund (DJRE) and the SPDR S&P Global Dividend Fund (WDIV). The dividend ETF invests in about 100 leading global companies, such as Vodafone, BAE Systems, Bank of Montreal and Coca-Cola.

Global LIC to list

Another global fund due to list on the ASX in mid-December is a listed investment fund. The PM Capital Global Opportunities Fund Limited (PGF) is from Sydney-based specialist global equity fund manager PM Capital, which manages $1.5 billion and has a 15-year track record.

Chris Donohoe, CEO of PM Capital, says: "With moderation in China's demand for commodities, some Australian companies are trading at significant premiums to their global peers and, with the prospect of a falling Australian dollar, we believe that the outlook for global equity returns in Australian dollar terms is attractive, especially relative to other investment opportunities." Donohoe says many portfolios are underweight global shares.

The investment mandate for the fund is based on the PM Capital Absolute Performance Fund (APF) guidelines; it has had a total return of 196.8% since its launch in October 1998.

This compares favourably with the MSCI World Index (net dividends reinvested, $A) total return of 32.6% to October 31, 2013.

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