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ETF Watch: New Listings (July 11–17)

by: Index Universe posted on: July 20, 2008 | about stocks: AFK / GULF

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By Heather Bell

NEW LISTINGS

WisdomTree Launches Dividend-Weighted GULF ETF

On July 15, the WisdomTree Middle East Dividend Fund (Nasdaq: GULF) became the latest frontier-dominated ETF to launch. Just as significantly, perhaps, is that it's also the second such type of fund to choose the world's dominant oil-producing region as its focal point for investing. With oil prices soaring, so too are Middle Eastern stock markets.

According to WisdomTree, because of rising oil prices, the correlation between the U.S. and the Middle East is one of the lowest to be found.

Although not listed as a pure frontier markets play, some 80% of GULF's stocks are from markets fitting that category. The other 20% represent larger-and relatively poorer-performing-emerging markets constituents. GULF currently covers seven major Middle Eastern markets—Kuwait, United Arab Emirates, Egypt, Qatar, Morocco, Jordan and Oman, although Bahrain is also eligible. The dividend-weighted index currently has about 70 components.

The PowerShares MENA Frontier Countries Portfolio (NASDAQ: PMNA) also launched recently. It's based on the NASDAQ OMX Middle East North Africa Index and covers many of the same countries. The fund's annual expense ratio is 0.70% after the application of a waiver.

GULF charges 0.88%.

Read the prospectus for GULF here.

Van Eck Launches Market Vectors - Africa

GULF wasn't the only frontier markets ETF to debut this week. Van Eck made sure it was in the first wave of frontier market ETFs with the launch of the Market Vectors Africa Index ETF (NYSE: AFK) on July 14.

The Market Vectors ETF tracks the Dow Jones Africa Titans 50 Index, which covers 50 stocks from 11 different markets on the continent: Nigeria, South Africa, Egypt, Morocco, Equatorial Guinea, Zambia, Angola, Mali, DR Congo, Kenya and Ghana. Keep in mind that the underlying index is not designed specifically to cover exclusively frontier markets in Africa; rather, it is a regional index covering African markets. African markets are mostly frontier markets, but South Africa and Egypt are examples of countries in the index typically classified as emerging—and they together make up nearly 40% of the index's total exposure.

Also, an interesting thing about this index is that many of the companies in the index are not actually domiciled in Africa but derive a majority of their revenues from African markets, with the most revenues being generated from the specific market with which they are associated. Egypt, South Africa, Nigeria, Kenya and Morocco fit Dow Jones' definition of investable markets and are represented by companies domiciled within their borders (and some that are not), while the remaining countries are represented in the index solely by offshore companies.

AFK charges a gross expense ratio of 1.20% waived down to a net expense ratio of 0.83%.

Read the prospectus for AFK here.