Ireland, Indonesia, and USA ETFs Launched by iShares

iShares launched three new single-country ETFs last Friday, May 7, 2010: iShares MSCI Ireland Capped Investable Market Index Fund (EIRL), iShares MSCI Indonesia Investable Market Index Fund (EIDO), and iShares MSCI USA Index Fund (EUSA). EIRL is the only Ireland-focused ETF currently available to US investors. These three pushed the number of current ETF and ETN listings to more than 1,000 for the first time ever.

iShares MSCI Ireland Capped Investable Market Index Fund (EIRL) (overview page) is designed to track the MSCI Ireland Investable Market 25/50 Index, a free-float adjusted market capitalization weighted index representing the top 99% of equities by market capitalization listed on stock exchanges in Ireland. The fund will have an expense ratio of 0.55%.

According to the EIRL fact sheet (pdf), the underlying index had 21 holdings as of 3/31/10, with the largest being CRH 21.8%, Kerry Group 10.7%, Elan Corp 9.3%, Bank of Ireland 5.6%, and C&C Group 4.9%. Sector representation is Materials 25.3%, Consumer Staples 23.3%, Industrials 17.5%, Financials 14.5%, and Health Care 12.6%. The other four major sectors (Energy, Telecommunications, Consumer Discretionary, and Technology) have no current allocation.

EIRL does not currently have any ETF competition in the U.S. The only other ETF to focus on Ireland, the NETS ISEQ 20 Index (former ticker IQE), was closed in January 2009.

iShares MSCI Indonesia Investable Market Index Fund (EIDO) (overview page) is designed to track a free-float adjusted market capitalization weighted index from MSCI representing the top 99% of equities by market capitalization listed on stock exchanges in Indonesia. The fund will have an expense ratio of 0.65%.

According to the EIDO fact sheet (pdf), the underlying index had 46 holdings as of 3/31/10, with the largest being Astra International 12.4%, Telekomunikasi 11.9%, Bank Central Asia 9.9%, Perusahaan Gas Negara 6.8%, and Bank Rakyat Indonesia 6.6%. The top sectors were Financials 28.7%, Energy 13.4%, Telecommunications 13.3%, Consumer Discretionary 12.4%, and Materials 10.1%.

EIDO will face competition from the Market Vectors Indonesia Index ETF (IDX). IDX was launched about 16 months ago, has assets of $386 million, and has expenses capped at 0.68%.

iShares MSCI USA Index Fund (EUSA) (overview page) is designed to track an MSCI capitalization-weighted index representing the top 85% of equities by market capitalization listed on stock exchanges in the United States. The fund will have an expense ratio of 0.15%.

According to the EUSA fact sheet (pdf), the underlying index had 595 constituents as of 3/31/10, with the largest being Exxon Mobil (XOM) 2.9%, Microsoft (MSFT) 2.1%, Apple (APPL) 1.9%, General Electric (GE) 1.8%, and Procter & Gamble (PG) 1.7%. The top sectors were Technology 19.2%, Financials 15.7%, Health Care 12.4%, Energy 11.3%, and Consumer Staples 11.0%.

Most US investors associate only international indexes with the MSCI moniker. However, MSCI has history on its USA index starting on 12/31/1969. The iShares literature classifies EUSA as a broad market fund and groups it with iShares Russell 3000 (IWV). However, with only 595 constituents and 85% of the US market being represented, I believe it is better classified as a large cap fund. As such, it faces stiff competition from numerous US large cap ETFs, including iShares S&P 500 (IVV) and iShares Russell 1000 (IWB).

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.