Comments on: New iShares Emerging Market and World ETFs

By: JW

JW — Tue, 03 Nov 2009 04:57:47 +0000

Hi CC:

Now that all ZEM, XEM, and CWO are widely available, I was wondering if you might do a cross-comparison of their performance and costs. I know you favour VWO, but I’m interesting in the Canadian-operated funds, especially ZEM and CWO.

By: Fière d’être Canadienne/ Proud to Be Canadian - Best Canadian Personal Finance Blogs Edition | MoneyEnergy

Wed, 01 Jul 2009 05:36:10 +0000

[...] The Canadian Capitalist needs little introduction. Many of us look up to this blog, which has a wealth of detailed investment and finance information for the Canadian market. See his recent entry on New iShares Emerging Markets and World ETFs. [...]

By: Tracking Error in Emerging Markets ETFs | Canadian Capitalist

Tracking Error in Emerging Markets ETFs | Canadian Capitalist — Mon, 29 Jun 2009 13:49:45 +0000

[...] 29th, 2009 · In a comment to an earlier post (see New iShares Emerging Market and World ETFs), Henry noted that the iShares MSCI Emerging Markets ETF (EEM) seemed to track the index better [...]

By: Weekly Dividend Investing Roundup - June 27, 2009 | The Dividend Guy Blog

Weekly Dividend Investing Roundup - June 27, 2009 | The Dividend Guy Blog — Sat, 27 Jun 2009 11:01:18 +0000

[...] ETFs to ponder [...]

By: John

John — Fri, 26 Jun 2009 14:18:05 +0000

Thanks for the reminder on the 1% bonus, I had forgot to check and its a good thing I did cuz they missed paying into one of my accts.

By: larry macdonald

larry macdonald — Thu, 25 Jun 2009 21:02:16 +0000

1. Did EEM outperform its index because of security lending? I believe the fees are higher for lending emerging-market stocks.
2. iShares states in their press release that their two new ETFs avoid the U.S. estate tax that would be applied on one’s death if they owned the U.S. ETFs. One might suppose this would be a reason to invest in them. But the US estate tax currently applies only if an investor has over $3.5 million in world assets. Even if they were above the threshold, there still are strategies to avoid the tax, e.g. incorporating etc.

By: Henry

Henry — Thu, 25 Jun 2009 20:35:56 +0000

According Vanguard’s website, VWO holds 791 securities and MSCI Emerging Market Index has 733 securities. According to iShares, EEM has 338 securities. Therefore, VWO is trying to be exactly like the index, while EEM is a passively managed to mimic the index.

I am just wondering if EEM outperformed the index by luck or skill.

By: Canadian Capitalist

Canadian Capitalist — Thu, 25 Jun 2009 15:44:59 +0000

Henry: Interesting observation. I went researching the tracking error of EEM and VWO. EEM is very interesting. It has positive tracking errors over 1, 3 and 5 years and since inception! VWO on the other hand closely tracks the index but the tracking error is negative.

EEM had a positive tracking error of 3.62% over the one year period to March 31, 2009; 0.66% over 5 years and 0.73% since inception. These are huge differences and makes me wonder if I was wrong in picking VWO over EEM. Any thoughts on why this might be so?

It makes no sense to me that iShares or any other vendors would offer a foreign ETF to Canadians that includes Canada. Why can’t these guys offer a one-stop ETF that has US, EAFE and emerging markets for a reasonable MER?

By: Chris

Chris — Thu, 25 Jun 2009 15:35:59 +0000

XEM looks to be the first non-hedged emerging markets ETF denominated in Canadian dollars. Too bad the MER is so high. Isn’t a non-hedged ETF supposed to be less expensive?

By: Sampson

Sampson — Thu, 25 Jun 2009 15:35:48 +0000

Hmm, maybe I’ve read the prospectus wrong, but basically they are charging 0.07% to allow you to buy EEM in CAD dollars. This is in addition to the withholding tax mentioned, and currency risk.

The withholding tax alone is probably enough to keep me away from this.