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NationCapShares: An ETF Idea for Developed, Emerging and Frontier Markets

by: Mike Havrilla July 22, 2008 | about stocks: EEM / EFA / FRN    

Mike Havrilla

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NationCaps Global Stock Index
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The table above presents a 53-stock NationCapShares exchange-traded fund [ETF] proposal that I have developed based on the proliferation and commercial success of single-country ETFs (e.g. iShares has over two dozen single-country ETFs with over $40 billion in net assets). The NationCaps Global Stock Index presented above includes the largest market cap company from each nation which must also be over $7 billion US Dollars in market cap and have a trailing 52-week stock price performance of greater than -25% in order to screen out the weakest performers.
 
The index is rebalanced quarterly on the basis of a semi-active rating system which considers each company's trailing 52-week stock price performance, dividend yield, market cap weighting, and net income weighting. Please note that this index was last updated 4/27/08 with quarterly rebalancing due at the end of this week. NationCapShares would provide investors with a blend of developed, emerging, and frontier markets in a single ETF -- combining and diversifying the benefits of existing ETFs such as iShares MSCI EAFE (EFA), iShares MSCI Emerging Markets (EEM), and Claymore/BNY Mellon Frontier Markets (FRN).

Disclosure: None

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This article has 5 comments:

  •  
    Jul 22 09:04 AM
    do you patent all these pipe dreams?
    Reply
  •  
    Jul 22 09:35 AM
    thanks for your interest - the ETF licensing deals and trademarks are already underway
    Reply
  •  
    Jul 22 10:58 AM
    According to Siegel and others, In the US at least, the largest-cap stock has a significant negative alpha. Why would you want to systematically capture that negative alpha across markets?
    Reply
  •  
    Jul 22 02:33 PM
    XOM is the only US-based company included in the 30 active components and it has outperformed the S&P 500 over the last 6 months, 1 year, 5 years, and 10 years. Also, why do you assume this data would apply to all other developed, emerging, and frontier markets/companies based outside of the US? Finally, this is a semi-active index with a performance-based rating system in place with quarterly rebalancing rather than a passive index which simply selects the largest market cap company from each nation.
    Reply
  •  
    Jul 23 08:41 AM
    Where can I sign up for this one?
    Reply
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