New ETF From Global X Targets 5 of 10 ASEAN Countries

Global X Thursday (2/17/11) introduced the newest member of its regional ETF offerings with the launch of Global X FTSE ASEAN 40 ETF (ASEA). There are 10 countries that currently comprise the Association of Southeast Asian Nations (ASEAN), but ASEA holds the 40 largest companies from just five of them.

The country weightings are Singapore 41.2%, Malaysia 32.8%, Indonesia 14.8%, Thailand 10.6%, and Philippines 0.6%. The five ASEAN nations without representation in the fund are Vietnam, Myanmar, Brunei Darussalam, Cambodia, and Lao PDR.

From reading the prospectus, it appears that FTSE, the index provider, claims there are only five countries in the Association, while the ASEAN itself claims to have ten. However, I believe the “frontier market” classification is the real reason for exclusion as constituents must be from the FTSE All-World universe, which consists of stocks from only developed and emerging markets.

Sector breakdown includes Financials 43.6%, Telecommunications 15.6%, Industrials 15.0%, Consumer Discretionary 10.6%, Consumer Staples 6.6%, and the other five GICS sectors represent only 8.7%.

The 10 largest stocks of the 40 holdings are DBS Group Holdings 6.0%, Singapore Telecom 5.7%, Oversea-Chinese Banking 5.6%, United Overseas Bank 5.0%, Astra International 4.9%, Malayan Banking 4.5%, Public Bank Fgn 4.5%, CIMB Group Holdings 4.5%, Sime Darby Bhd 4.1%, and Keppel Corp 3.2%.

ASEA has an expense ratio of 0.65%, and additional information is located in today’s press release (pdf), ASEA summary page, and fact sheet (pdf). The prospectus (pdf) covers four ETFs in all: ASEA, the recently launched Global X FTSE Andean 40 ETF (AND), and the two unannounced offerings of Global X S&P/TSX Venture Canada ETF (TSXV) and Global X Next 11 ETF (NXTE).

Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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