Content provided by Case Eichenberger, CLS Client Portfolio Manager
CLS is known in the financial industry as an experienced ETF strategist. We utilize these versatile investment tools every day. From trading to selecting and everything in between, ETFs are our specialty. We have written several helpful articles on the general nature of ETFs that can be found here:
But let’s take a step back for a moment and break ETFs down a different way. Typically, we would write about E & T for Exchange Traded and F for Fund. But I want to go even simpler: What do ETF names signify?
For example, Deutsche X-Trackers Harvest CSI 300 China A-Shares ETF (ASHR). What does that complicated name mean to the end investor? How about this one: SPDR MSCI ACWI ex-US (CWI)? What exactly we are looking at? I like to break it down left to right:
First, SPDR: This is the family of ETFs from State Street Global Advisors (SSGA), which is the company that issues the ETF. If you are more familiar with the mutual fund world, think of SSGA’s SPDRs as being like Capital Group’s American Funds – the company that creates the fund.
Next, MSCI: This is the name of the company that provides the index to the issuer. Almost every ETF tracks an underlying, passive index. MSCI is the largest index provider to the ETF industry. You can compare MSCI to another well-known index provider, Standard and Poor’s or S&P. Both create and administer indexes to the investment world.
Finally, we have ACWI ex-US. At first glance it looks confusing, but it’s actually pretty straight forward. ACWI is the All Country World Index (from MSCI), and ex-U.S. stands for ‘excluding the United States.’ This index tracks global stocks, excluding U.S.-listed companies. Investors in this ETF gain a collection of stocks from countries outside the U.S.
Almost every ETF follows this nomenclature.
At CLS, we frequently host ETF industry partners at our Omaha, NE headquarters to talk about ETFs, so we can continue to expand our knowledge of these funds. This is important to us as the ETF world is an ever-changing landscape, which can get confusing at times. Hence the need for an experienced ETF strategist to help navigate.
Learn more about CLS’s experience with ETFs here: http://clsinvest.com/professionals/etfs