ETF Launches: Where's The Excitement?

iShares FTSE Developed Small Cap ex-North America Index Fund (NasdaqGM: - ) is not the first international small cap, but with a .50% annual expense ratio, it beats comparable international small-cap ETFs by at least .10%. Likewise, a suite of regional real estate ETFs come in at .48%, also .10% lower than competing offerings:

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund (NasdaqGM: - )iShares FTSE EPRA/NAREIT Asia Index Fund (NasdaqGM: - )iShares FTSE EPRA/NAREIT Europe Index Fund (NasdaqGM: - )iShares FTSE EPRA/NAREIT North America Index Fund (NasdaqGM: - )

One might be tempted to also call iShares S&P Asia 50 Index Fund (NYSEArca: - ) uncompetitive. A cheaper version of Asian mega-cap is the PowerShares BLDRS Asia 50 ADR (NasdaqGM: - ) at .20% less in annual fees. However, these are very different creatures. AIA is a new kind of Asia fund. It invests directly into Asian stock markets, and has loads of Chinese companies. ADRA, in contrast, buys only stocks listed on North American exchanges. In practice, this means a heavy dose of established Japanese funds. It should be acknowledged that buying a stock in New York is a lot less work than buying one in Shanghai. In addition, the price of foreign stocks listed in US exchanges includes fees paid for them to become American Depository Receipts or other foreign-based securities. Therefore, the savings are not all that they seem. In this case, the investor is encouraged to focus on the real choice involved: China or Japan (China's valuations look downright scary to us.)

Likewise, iShares MSCI BRIC Index Fund (NYSEArca: - ) goes abroad to gain access to Brazil, Russia, India and China, whereas Claymore BNC/BRIC (AMEX: - ) buys only ADRs in North America. When all the costs are calculated, fees are fairly similar. Both are heavy on Chinese and Brazilian firms. The biggest difference appears to be greater accounting transparency which ADRs bring at a price of less comprehensive exposure to a market.

Finally we come to a unique offering: the iShares MSCI Chile Index Fund (NYSEArca: - ). Chile has much to offer, including a reputation for transparent business dealings, a solid educated middle class and political stability. Few investors know this country, but its obscurity does not make it any less worthwhile to those who do. Few investors will notice ECH, but it is no less welcome. At .74% in annual fees, it is not as cheap as it should be, but competition will surely rectify the situation.

Barclays' new launches demonstrate that new ETFs are welcome for a myriad of reasons, but not necessarily worthy of the attention they used to merit. The ETF universe is at a curious kind of vanishing point, where each new launch is invisible to most investors, but investors are so spread out across investment space that every fairly priced ETF is relevant to some investor. The ETF world is expanding just as cable TV did until it reached about 500 channels. At that point channels kept being added, but each new one started with a noticeably smaller audience. Someday perhaps the ETF industry will reach tens of thousands of funds as is the case with traditional mutual funds today. The latest mutual fund launch is truly irrelevant. In the ETF world, a new launch still adds value.

Co-founder of indexfunds.com, author of two books on investing, and founder of ETFzone.com, Will has been writing on indexing issues for 8 years. He holds an MBA from the University of Texas at Austin.