Barclays Launches International ETFs

April 1, 2008

SAN DIEGO (ETFguide.com) - Barclays Global Investors (BGI) has launched five new iShares international exchange traded funds (ETFs) and one new currency exchange-traded note (ETN). 

The iShares MSCI ACWI (All Country World Index) and MSCI ACWI ex-US Index Funds provide broad global exposure with highly regarded benchmarks that are widely used by institutional investors. 

ACWX will compete head-to-head with the SPDRs (Ticker: CWI), which tracks the exact same benchmark. The underlying index is a free float-adjusted market capitalization index that is designed to measure equity market performance in all global developed and liquid emerging markets outside of the US. Both funds will have the same expense ratio of 0.35 percent.

The San Francisco, CA-based asset manager also introduced three single country ETFs, covering Israel (Ticker: EIS), Thailand (Ticker: THD), and Turkey (Ticker: TUR).

With these new funds, iShares now offers ETFs with over 60 global, international and emerging market flavors.

“While international investing has become nearly commonplace, many U.S. investors remain heavily weighted in domestic securities,” said Noel Archard, Head of U.S. iShares Product Development. “Non-US markets account for approximately 57 percent of the world’s equity market capitalization and performance of these markets continues to differ from the U.S. market.”

Archard added, “These new ETFs will help investors who wish to access both broad or narrow exposures to global equities do so in one cost-efficient trade.  Investing in emerging market countries offers investors attractive diversification benefits relative to single stock investments, and our new ACWI-based offering will nicely round out the excellent coverage we provide across broad-based international investments.”

The new iPath ETN is linked to the performance of the Barclays Intelligent Carry Index. It’s designed to reflect the total return of an “Intelligent Carry Strategy” which seeks to capture the potential return from a strategy of investing in high yielding currencies with the exposure financed by borrowings in low-yielding currencies. 

Institutional investors have used the "carry trade" strategy to buy currencies in regions with high interest rates, while shorting currencies in countries having low interest rates in the hope of capturing returns. In addition to capitalizing on the carry trade strategy, exposure to currencies can provide investors with a historically non-correlated asset to add to a portfolio, something that has grown increasingly valuable as global markets and economies have grown increasingly interdependent. 

The pool of currencies to which the index may apply these strategies is commonly referred to as the “G10 currencies” and includes the U.S. dollar (USD), the euro (EUR), the Japanese yen (JPY), the Canadian dollar (CAD), the Swiss franc (CHF), the British pound sterling (GBP), the Australian dollar (AUD), the New Zealand dollar (NZD), the Norwegian krone (NOK) and the Swedish krona (SEK). 

The index is composed of ten cash-settled currency forward agreements, one for each index constituent currency, as well as a “Hedged USD Overnight Index” which is intended to reflect the performance of a risk-free U.S. dollar-denominated asset. 

The iPath Optimized Currency Carry ETN is a senior, unsecured, unsubordinated debt security issued by Barclays Bank PLC.