Northern Trust's Single-Country ETFs Based on 'Flagship' Indexes

Following the footsteps of Barclays, State Street and Vanguard Group, the Chicago-based Northern Trust became the latest financial services giant to enter the rapidly growing world of ETF (Exchange Traded Fund).

Northern Trust came up with offerings that follow locally recognized indexes for foreign markets such as the U.K, Japan and Germany. Several other funds are in registration, including broader international-stock ETFs and real-estate portfolios.

Northern Trust's strategy for its first ETFs is to go with whichever local indexes are best-known (the 'flagship' index) among investors in a particular country, much like the Dow Jones Industrial Average is for USA. Northern Trust, as of last Friday, managed a dozen Northern Exchange Traded Shares, or Nets, such as Nets DAX for Germany (DAX), Nets CAC 40 for France (FRC) and Nets FTSE 100 for the U.K. (LDN) and Nets Topix (TYI) for Japan. The company has filed for more individual country funds, like Portugal and Israel.

Although less diversified than other international ETFs, single-country ETFs are usually diversified by companies and sectors within that country. Investors seeking targeted exposure to specific countries or customized portfolios of groups of countries may find such ETFs as attractive investment vehicles.

It would be interesting to observe how the new ETFs of Northern Trust would fare in what is already a packed field dominated, in particular, by Barclays Global Investors with its own family of iShare series of ETFs tied to single-country benchmarks, most of which are already quite popular with investors.

Three New iShares ETFs for Global Investment

Three new iShares exchange traded funds (ETFs) began trading on NYSE Arca today. The funds provide investors with an opportunity to participate in global growth prospects and access innovation in developing marketplaces, the company said.

iShares MSCI EAFE Small Cap Index Fund (SCZ): Tracks the performance of 40% of the eligible small cap universe in each industry group of the iShares MSCI EAFE Small Cap Index. As of June, 2007, the MSCI EAFE Index consisted of the following 21 developed market country indexes: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom.

iShares S&P Global Infrastructure Index Fund (IGF): Tracks the performance of the iShares S&P Global Infrastructure Index which measures stocks of large infrastructure companies around the world including companies involved in utilities, energy and transportation infrastructure, management or ownership of oil and gas storage and transportation; airport services; highways and rail tracks; marine ports and services; and electric, gas and water utilities.

iShares MSCI Kokusai Index Fund (TOK): Tracks the performance of the iShares MSCI Kokusai Index which is designed to measure equity market performance in those countries that MSCI has classified as having developed economies, excluding Japan ("DEEJ"). As of June 2006, the MSCI Kokusai Index consisted of the following 22 country indexes: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States.

Four New ETFs from iShares for Global REIT

Effective Friday, November 16, Barclays Global Investors listed four new exchange traded funds (ETFs) in NASDAQ market, that track real estate investment trusts or REITs:

iShares FTSE EPRA/NAREIT Global Real Estate ex-U.S. Index Fund (IFGL)
iShares FTSE EPRA/NAREIT Asia Index Fund (IFAS)
iShares FTSE EPRA/NAREIT Europe Index Fund (IFEU)
iShares FTSE EPRA/NAREIT North America Index Fund (IFNA).

Interestingly, all four ETFs allocate heavily to Australia, with Westfield Group being the largest single stock in all of them. Westfield is an Australia-based mall operator but approximately half of the malls operated by the company are in US and is thus exposed to the behavior of US economy and consumer sentiment. All four funds also have significant investments in Hong Kong and Japan markets.

It should be noted that Barclays already had an ETF similar to IFGL with a very similar name: iShares S&P World ex-US Property Index Fund (WPS). Along with a competitor in its own house, IFGL also needs to compete with 3 outsiders -- all of which are considered popular investment vehicles for diversified investment in the global real estate market:

SPDR Dow Jones Wilshire International Real Estate ETF (RWX),
WisdomTree International Real Estate ETF (DRW).

For purchasing ETFs, expense ratio is an important consideration to keep in mind. The ETFs from iShares, IFGL and WPS, have lower expense ratio (at 0.48%) than RWX (0.60%) or DRW (0.58%).

Indian Stocks Soaring High

Since the drop in global stock markets in mid-August, Indian stocks are soaring high in the midst of a very volatile market. It's rather hard for individual investors who are unfamiliar with Indian conditions and its econo-political scenerios to focus on individual stocks. However, there are 3 funds which may be considered as good vehicles to reach the global investment trend of the 21st century -- 'Destination India' :

(i) Morgan Stanley India Investment Fund (IIF). The best-performing holdings in its portfolio include Nestle India, Bharat Heavy Electricals, and Jyoti Structures. On Friday this Exchange Traded Fund (ETF) closed at $58.93

(ii) The India Fund Inc. (IFN) is a closed-end mutual fund. The fund allocates 15.8% of assets to software, 13.2% to oil and gas, 10.3% to banks, 9.4% to telecommunications, 5.4% to auto manufacturers and 4.9% to electrical components and equipment. On Friday it closed at $63.35.

(iii) iPath MSCI India Index ETN (INP). This is an exchange-traded note, an investment vehicle very similar to an exchange-traded fund. The difference is that ETNs are designed to have less tracking error than ETFs so that the value of the investment more closely mirrors that of the underlying index. On Friday it closed at $91.70.

Investing in China, India : 'Irrational Exuberance'?

Stock markets in China and India are soaring high every other day. In USA, ADRs (American Depository Receipts) of stocks from these two countries are regularly seeing new highs. We think it's time to sit down quietly and decide whether you would like to be a part of what seems to be a repeat of year 1999, the year of technology stocks, when Fed Chairman uttered those two words 'irrational exuberance'.

We are afraid that these markets are being driven predominantly by liquidity (rather than value or earnings) that aggressive investors are regularly throwing in just for the hope of becoming richer in an easy way. We may ask question, how many of those individual investors are looking closely at balance sheets of these companies? How many of them are keeping track of the moves that management of these companies are making, while sitting in Bangalore or Shanghai? Are these companies handling their accounts properly and with all truthfulness?

We have bitter memories of malpractices by our own US companies (Enron, and so on...) right before the noses of the authorities of Securities and Exchange Commission. How can we trust all those earning numbers from these companies in emerging markets? After all, big scandals happened in both China and India not so long back and, in fact, the absence of democracy and the absence of a free press in China make that country more vulnerable to such malpractices.

If you were there in 1999-2000, remind yourself those bright mornings and evenings when analysts used to put 'Buy' recommendation on any 4 letter ticker symbols. Infospace, Comverse,.... Where are those stocks now? As John Bogle of Vanguard once said,"We are too smart for our own good'.

It's thus time to sit down quietly and have a deep look at your portfolio of Chinese and Indian stocks and ask yourself: "How much do you know about the earnings and activities of the companies that you are throwing your hard-earned money on?" If it's 'no' for most of your stocks, it's time to rationalize your feelings and put a rein on your exuberance. A steep fall always hurts and it always falls with all other good things that you worked so hard to acquire and possess: confidence, grace, self-respect.

DRW : WisdomTree's new ETF on Foreign Real Estate

In mid-December, the State Street Global Advisors (State Street), the investment management arm of State Street Corporation launched the SPDR Dow Jones Wilshire International Real Estate Fund (RWX) on the American Stock Exchange. The ETF was billed to be the first such offering designed to track overseas listed real-estate stocks and is the first ETF to monitor performance of publicly traded global real estate securities outside of the U.S.

Since its launching at the end of last year, the fund has attracted more than $750 million in assets. The SPDR fund follows a benchmark that weights about 150 companies by market capitalization.

Today, a new Global REIT ETF called the WisdomTree International Real Estate Fund (DRW) started trading, which, however, emphasizes the biggest dividend payers in developed foreign markets. The expectation is that companies that emphasize paying out strong dividends are by their very nature going to be managed more conservatively

The fund tracks an index made up of some 224 real-estate development and operating companies in 19 developed markets throughout Europe, Asia and the Far East. The benchmark excludes real-estate investment trusts and operators trading on illiquid exchanges and incorporated outside developed countries. WisdomTree also requires companies to have market caps equaling at least $100 million. They must trade at least $100,000 on average per day during a 6-month period.

The largest country weighting in the index goes to Australia, at about 30% of total assets. No. 2 is Hong Kong, at 22%, with Japan at around 11%. Other countries are represented in single-digit percentages. WisdomTree has estimated that its new fund's trailing price-to-earnings ratio is less than 11. The new fund, DRW, charges an annual expense ratio of 0.58%, slightly less 0.60% charged by the StreetTracks fund, RWX.

We expect both these funds to benefit squarely from the developing markets of REIT in other developing countries and may beat US-based REIT ETFs like the iShares Dow Jones U.S. Real Estate Fund (IYR) or the iShares Cohen & Steers Realty Majors Fund (ICF). These are useful tools for diversifying anyone's portfolio to various other countries.

ETF for Global Real Estate

Today the State Street Global Advisors (State Street), the investment management arm of State Street Corporation launched the streetTRACKS DJ Wilshire International Real Estate ETF (RWX) on the American Stock Exchange (Amex). The ETF is billed to be the first such offering designed to track overseas listed real-estate stocks and has an expense ratio is 0.6%.

RWX is based on the Dow Jones Wilshire Ex-US Real Estate Securities Index and is the first ETF to monitor performance of publicly traded global real estate securities outside of the U.S. To be eligible for the index, a company must have a market cap of at least $200 million and must derive at least three-fourths of its revenue from the ownership and operation of real-estate assets. The average market cap of an index holding is roughly $2.8 billion. The ETF doesn't focus exclusively on real-estate investment trusts, or REITs, because some countries such as Germany and UK have not yet adopted legislation that gives tax breaks to the companies similar to the United States.

RWX is the latest in State Street's series of international ETF offerings. Recently, State Street launched two Japan-focused ETFs: streetTRACKS Russell/Nomura PRIME JAPAN ETF (JPP) and streetTRACKS Russell/Nomura Small Cap Japan ETF (JSC), both of which are based upon indexes created by the Russell Investment Group and Nomura Securities Co., Ltd.

It may be recalled here that the State Street manages an ETF tracking the U.S. market, StreetTracks Dow Jones Wilshire REIT ETF (RWR) , that is up about 32% year to date and boasts a 5-year annualized return of about 23%. But many fear that the US REIT market is now overvalued and a correction is now overdue. The new ETF will thus provide a good opportunity of diversification.

RWX started trading today at $60.10 and at the end of the day closed 54 cents up at $60.64.

Housing Boom in India

As we all know by now that housing market in the U.S. is slowing. Last week the Office of Federal Housing Enterprise Oversight (OFHEO) reported that U.S. home prices grew at an annual rate of 3.5% in the 3rd quarter. Including the 3rd quarter, home prices are up 7.7% in the past year, the slowest in three years. A year ago, prices were rising at 13.4%. In last 5 years, home prices have risen by a whopping 57%. Also, according to an estimate released by the Commerce Department, sales of new homes fell 3.2% in October. New-home sales are now down 25.4% in the past year.

Perhaps this is the time to utter that good old Indian saying in Sanskrit 'Vasudhaibo kutumbakam' which means 'the whole world is my family'. It is time to take a global view and look elsewhere and what about India? Yes, India is the country where demand for housing is on the rise -- in fact in great demand with the middle class families steadily embracing more and more wealth throughout the nation. The Rich class is also trying to grab more square feet of their luxurious existence in hot markets like in Mumbai or Bangalore or New Delhi or Kolkata. And do not forget the Non Resident Indians, popularly called NRI, who are pouring in money to have a place of luxury as their vacation home.

Unfortunately, for average investors in US, there are no direct plays that can reap the full benefit of this housing boom in India, but there exist at least two indirect plays in the form of American Depository Receipts (ADR). They are two of India's fastest growing banks are the largest lenders that cater to the housing sector: Icici Bank (IBN) and Housing Development Finance Corporation or HDFC Bank (HDB).

The HDFC Bank is owned by HDFC Housing, one of the largest housing development finance companies in India. Icici Bank now operates in 14 countries a key player in the fast growing remittance market for NRIs who need to send money back to their homes. It now offers remittance services to customers who can send money to India, Sri Lanka and the Philippines.

Both these banks have gained good foothold in India's real estate market as well as the financial sector. With support from India's booming economy, these two stocks are supposed to perform great as a long term investment.

Disclaimer: We do not own these 2 stocks in our personal portfolio

PSP: Private Equity Investing

Powershares Listed Private Equity Portfolio (PSP) is another innovative ETF (exchange traded fund) on the street from PowerShares Capital Management, a unit of mutual-fund giant Amvescap Plc. PSP began trading on the American Stock Exchange last week. It tracks an index of 34 listed private-equity companies that primarily invest in and lend capital to privately-held firms. So, the fund provides ordinary investors access to the potentially lucrative world of start-ups, business loans and corporate buyouts -- traditionally the exclusive domain of large financial institutions and wealthy individuals.

The fund doesn't participate directly in non-listed private equity, but rather in publicly traded companies that invest in private equity themselves. Its tracking index is tilted more toward late-stage, established companies to reflect the industry and because they're less risky than pre-IPO companies with scant revenue.

Companies in the index must have a market capitalization of at least $50 million and a share price over $1. The index limits individual holdings at 10% and may include U.S.-listed ADRs of foreign corporations, but currently doesn't contain any. Inclusion in the index depends on a company's reputation, valuation of the underlying securities, management, financial qualities and historical performance. The index seeks diversification by stage of investment, sector and capitalization structure. Types of private-equity investments include leveraged buyouts and mezzanine financing. The index is rebalanced on a quarterly basis. the index's largest holding is publicly traded buyout and mezzanine fund American Capital Strategies (ACAS). The full list of companies is here. The fund has expense ratio of 0.60%.

However, for small investors it may not be a right choice of investment. The index is too narrow, which could make the fund extremely volatile and subject to significant gains and losses. Some of the companies in the tracking index are small and illiquid, which could create premiums and discounts to net asset value and drive up trading costs.

China Mutual Funds

Retail mutual funds investing in China are scoring big gains in 2006. Here are 5 Top-performing mutual funds and one exchange traded fund with their year-to-date gain percentage:

Oberweis China Opportunities Fund (OBCHX) 53.1%;
Old Mutual Clay Finlay China (OMNAX) 48.2%;
John Hancock Greater China Opportunities (JCOAX) 42.9%;
Dreyfus Premier Greater China (DPCAX) 42%;
Matthews China Fund (MCHFX) 36%.

The iShares FTSE/Xinhua China 25 Index (FXI) ETF had year-to-date gain of 39.4%. It tracks the 25 largest and most liquid Chinese companies trading on the Hong Kong exchange.

Fidelity China Region Fund (FHKCX) gained relatively smaller percentage of 19.7% but we like it better because of its very balanced and diversified portfolio which can be sustained over a long term. The top performing fund Oberweis is only one year old and it focusses on small-cap and midcap stocks that stand to benefit from China's growing consumer class, but such a portfolio is too risky to carry on over a long time horizon. Oberweis' phenomenal gain may soon be followed by too much of volatility which might offset its recent gain to bring it down to a reasonable level of long term growth.
[Disclosure: We donot own any of these funds in our personal portfolio]

Foreign Investment & ADR

It is a good practice to own some foreign stocks thus lowering your risk with diversification and increasing your return. Investors still need to do their homework well on any country and company in which they wish to invest. However, ready access to such research is sometimes very hard to get. Recent downturn in emerging markets also sent a feeling of nervousness among investors.

American Depository Receipts (ADR) have been a popular investment tool in recent months. The bulk of these listings are from Europe, though emerging markets are increasing in representation. ADRs from China and India have been very popular and successful investments. We can tell you so many names which have consistently produced good return, but, as you know, we always hesitate several times before investing in any individual stock.

Like all wise investors if you take the issue of diversification seriously and wish to put some money in ADRs to receive a chunk of the global rise of economy, we think there is something better than ADRs - That is an Exchange Traded Fund (ETF) for ADRs. In fact, there are four of those.

Nasdaq Financial Products Services and The Bank of New York offers BLDRS, a family of exchange-traded funds ("ETFs") based on The Bank of New York ADR IndexSM, a real-time index tracking U.S. traded depositary receipts (For details visit the ADR IndexSM section of adrbny.com). The BLDRS Fund Family is currently made up of four ETFs, including two market index funds and two regional index funds:

1. BLDRS Emerging Markets 50 ADR Index Fund (ADRE),
2. BLDRS Developed Markets 100 ADR Index Fund(ADRD),
3. BLDRS Europe 100 ADR Index Fund(ADRU) ,
4. BLDRS Asia 50 ADR Index Fund (ADRA).

All of them have very low expense ratio of only 0.30. We think all of these are good long time investments especially for retirement accounts.

WNS: New ADR from India

India is one of the strongest emerging markets and any new public offer from that country in a US stock exchange creates lot of interest and today was no exception.

WNS Holdings Ltd. is the IPO that started trading on the New York Stock Exchange today with the ticker symbol WNS. This is the 10th listing of an ADR (American Depository Receipt) from India. The stock rose to close at $24.50 from its debut price of $20 on volume of about 6.8 million shares.

WNS began operations in 1996 as an in-house unit of British Airways and started focusing on providing business process outsourcing services to third parties in year 2003. The company employs about 10,500 people. WNS Holdings has business with many U.S. firms.

Other 9 Indian ADRs are: Infosys (INFY), Wipro (WIT), Dr. Reddy's Laboratory (RDY), HDFC Bank(HDB), ICICI Bank Ltd (IBN), Satyam Computer Services (SAY), Tata Motors (TTM), Mahanagar Telephone (MTE), Videsh Sanchar (VSL), Silverline Tech (SLTTY), Rediff.com (REDF).

Splits of International Funds

Nasdaq Global Funds Inc., a unit of the Nasdaq Stock Market Inc.(NDAQ) announced its plan for 3-for-1 stock splits of its international Exchange Traded Funds (ETFs) known as "Builders" (read our past posting) : BLDRS Asia 50 ADR Index Fund (ADRA), BLDRS Developed Markets 100 ADR Index Fund (ADRD) and BLDRS Europe 100 ADR Index Fund (ADRU). Nasdaq also has authorized a 4-for-1 split for BLDRS Emerging Markets 50 ADR Index Fund (ADRE) .

The four ETFs, which are structured as unit investment trusts, track indexes based on American Depository Receipts (ADR) of foreign companies. Annual expenses for each portfolio are 0.30%, not including broker commissions.

The payment date for the splits is July 7 for shareholders of record June 22. The decision was taken in an effort to make these funds more affordable for individual investors following their very strong run in recent months. However, in last few weeks these funds have taken big hits as world markets, and emerging markets in particular, tumbled on expectations for further interest-rate hikes by central bankers and concern that global economic growth will slow in months to come.

India Going Strong

Today U.S. stocks ended higher (Dow Jones Industrial Average ended at 11317) as stabilizing long-term interest rates, strong Morgan Stanley earnings and a labor deal at General Motors Corp. lifted the Dow Jones Industrial Average to its best level in nearly 5 years.

It is also noteworthy in these days of global investment strategy that only yesterday at the opposite end of the world the Indian Stock Exchange benchmark Sensex also touched an all-time high of 11,001.

India is enjoying a great bull market for quite some time now. It only took 29 trading sessions to reach the 11,000-mark from 10,000 level, the shortest possible time for covering 1,000 points. Positive budget proposals, robust economic growth, expectations of higher than 8% GDP growth and last but not the least, first roadmap to be announced by the Reserve Bank of India (RBI - equivalent of our Fed) on capital account convertibility by July'2006, cleared the decks for the Sensex to cross the 11,000-mark.

The unprecedented bull run started on May 6, 2003 when the Sensex was at 3,001.21 level. In took just 67 trading sessions to cross the 4,000 mark and touch 4,026.27 points on August 19, 2003. We covered the timeline on the rise of the Sensex through Indian stock market history in our past posting of November 29, 2005 when Sensex touched 9000 mark. The Sensex reached the 10K-mark on February 7, 2006 -- within about 2 months and 1 week.

The Bombay Stock Exchange (BSE) Sensex comprises of these 30 stocks: ACC, Bajaj Auto, Bharti Tele, BHEL, Cipla, Dr Reddy's (RDY), Gujarat Ambuja, Grasim, HDFC, HDFC Bank (HDB), Hero Honda, Hindalco, HLL, ICICI Bank (IBN), Infosys (INFY), ITC, L&T, Maruti, NTPC, ONGC, Ranbaxy, Reliance, Reliance Energy, Satyam, SBI, Tata Motors (TTM), Tata Power, Tata Steel, TCS, and Wipro (WIT).

The Companies with names in red ink are traded in USA as American Deposit Receipt (ADR). All of them had great performance since their launch in US market.

Resurging Europe

"Break out the champagne - Europe to grow faster in 2006,” so says the European Commission (EC).

In a much more upbeat report than any in recent times, the EC projects 2.2% GDP growth for the 25-nation European Union, with the 12-nation, euro-based Eurozone hitting 1.9%, courtesy of beefier corporate profits and higher investment.

Breaking down the individual nations’ growth, Germany finally looks set to hit a more respectable level of expansion at 1.5%. Spain is slated to come out on top at 3.1%. The economies of the UK, France and Italy are forecast to grow 2.4%, 1.9% and 1.3%, respectively.

Wish to invest in Europe? The San Francisco-based firm, Barclays Global Investors (BGI) provides several exchange traded funds (ETFs) based on Index tracking investment markets of several countries: Austria (EWO), Belgium (EWK), European Monetary Union (EZU), France (EWQ), Germany (EWG), Italy (EWI), Netherlands (EWN), Spain (EWP), Sweden (EWD), Switzerland (EWL), United Kingdom (EWU), S&P Europe 350 Index Fund (IEV).

Another way to invest in Europe is through a bucket of American Deposit Receipts of European Companies: BLDRS Europe 100 ADR Index (ADRU) offered by Nasdaq and the Bank of New York.

Foreign Investment Funds

It is a good practice to own some foreign stocks thus lowering your risk with diversification and increasing your return. Investors still need to do their homework well on any country and company in which they wish to invest. However, ready access to such research is sometimes very hard to get. Lower dollar in recent months have been favorable for some of the stocks, but if the dollar starts strengthening itself for an extended period, investors may find themselves in troubled water.

American Depository Receipts (ADR) have been a popular investment tool in recent months. The bulk of these listings are from Europe, though emerging markets are increasing in representation. ADRs from China and India have been very popular and successful investments. We can tell you so many names which have consistently produced good return, but, as you know, we always hesitate several times before investing in any individual stock.

Like all wise investors if you take the issue of diversification seriously and wish to put some money in ADRs to receive a chunk of the global rise of economy, we think there is something better than ADRs - That is an Exchange Traded Fund (ETF) for ADRs. In fact, there are four of those.

Nasdaq Financial Products Services and The Bank of New York offers BLDRS, a family of exchange-traded funds ("ETFs") based on The Bank of New York ADR IndexSM, a real-time index tracking U.S. traded depositary receipts (For details visit the ADR IndexSM section of adrbny.com). The BLDRS Fund Family is currently made up of four ETFs, including two market index funds and two regional index funds:

1. BLDRS Emerging Markets 50 ADR Index Fund (ADRE),
2. BLDRS Developed Markets 100 ADR Index Fund(ADRD),
3. BLDRS Europe 100 ADR Index Fund(ADRU) ,
4. BLDRS Asia 50 ADR Index Fund (ADRA).

All of them have very low expense ratio of only 0.30. We think all of these are good long time investments especially for retirement accounts.

India's Sensex hits 9000

Usually we avoid repeating the same kind of topic in our successive postings. But the run that Indian stock market is having over the last few years is worth all the attention of US investors. Yesterday India' benchmark Sensex index crossed the magical figure of the 9000 mark and touched a life-time peak of 9000.32 points at mid-session on frantic buying spree by Foreign Institutional Investors (what Indians love to call FIIs) and Indian institutional and individual investors. FIIs continued to remain the major buyers on hopes that the India’s economic condition and the corporate fundamentals would continue to be strong.

For our readers who are not so much aware of the Indian market, here we present a short introduction to Sensex and a timeline of its spectacular achievements. The benchmark index of Indian stock market, Sensex was first compiled in 1986, is a 'Market Capitalisation-Weighted' Index of 30 component stocks representing a sample of large and financially sound companies: ACC, Bajaj, Bharti, BHEL, Cipla, Dr Reddy's, GACL, Grasim, HDFC, HDFC Bank, Hero Honda, Hindalco, HLL, ICICI Bank, Infosys, ITC, L&T, Maruti, NTPC, ONGC, Ranbaxy, Reliance, Reliance Energy, Satyam, SBI, Tata Motors, Tata Power, TCS, Tisco and Wipro.

Here is the timeline of its landmark achievements:
1000 (July 25 1990): Touched the magical four-digit figure for the first time and closed at 1,001 in the wake of a good monsoon and excellent corporate results.
2000 (January 15, 1992): Crossed the 2,000-mark and closed at 2,020 followed by the liberal economic policy initiatives undertaken by the then finance minister and current Prime Minister Dr Manmohan Singh.
3000 (February 29, 1992): Surged past the 3000 mark in the wake of the market-friendly Budget announced by the then Finance Minister and current Prime Minister Dr Manmohan Singh.
4000 (March 30, 1992): Went past the 4,000-mark and closed at 4,091 on the expectations of a liberal export-import policy. It was then that a major financial scam hit the markets and Sensex witnessed unabated selling.
5000 (October 8, 1999): It took 7 years for Sensex to repair the damage from the scam before it crossed the 5,000-mark after the BJP-led coalition won the majority in the 13th Lok Sabha election (BJP is now the major opposition party) .
6000 (February 11, 2000): The infotech boom took the Sensex past the 6,000-mark and hit and all time high of 6,006.
7000 (June 20, 2005): News of the settlement between the Ambani brothers (Heirs of Reliance Industries) boosted investor sentiments and the scrips of RIL, Reliance Energy, Reliance Capital and IPCL made huge gains.
8000 (8th September, 2005): More and More interest from foreign investors and Sensex crossed 8000 mark on brisk buying by foreign and domestic funds in early trading.
9000 (28th November, 2005): You know by now why.

We feel India has lot to give to US investors in years to come. The advantages of India are manifold: (i) Good democracy and free press and media, (ii) Thriving middle class which is embracing consumerism, (iii) English-educated knowledgable workforce, (iv) Existence of mature financial and regulatory institutions, (v) The urge among Indian youth to show to the rest of the world that they really matter.

Riding Indian Tiger

On last Saturday, the benchmark for Indian stocks, the Bombay Stock Exchange's Sensex 30 Index reached an all-time high of 8900. It's having a multi-year run upwards despite the slump in US market in last few years and US average investors in India's ADRs (American Depository Receipts) are enjoying their ride on this quite strong Asian tiger. If you do not like to take the risk of investing in individual companies, you may consider one of the following 5 funds that invest in India:

1. Matthews India Fund (MINDX) from Matthews International Capital Management. This no-load fund was launched on Nov 1 at a price of $10. Last Friday it closed at $10.61. Its expense ratio is 2% and minimum investment is $2500 for non-retirement and $500 for retirement funds.
2. Eaton Vance Greater India Fund (ETGIX). This carries a 5.75% initial sales charge, or load. Expense ratio is high 2.77% and minimum investment is $1000.
3. Oppenheimer Developing Markets Fund (ODMAX). Again a good choice for diversification. The fund is based on various developing countries in all continents. Its expense ratio is 1.52%. This again carries a front load of 5.75% and minimum investment is $5000. The fund invests 15.5% of its total asset in India. Other major countries in its portfolio are South Korea (19.9%), Brazil(19%)
4. Matthews Pacific Tiger Fund (MAPTX). It's an Asian regional fund (no load) and thus provides better diversification. This fund has about 7.6% of its assets invested in India, whereas 32.4% is in China. Its expense ratio is 1.32%.
5. Matthews Asian Technology Fund (MATFX). This no-load fund invests 7.7% of its assets in India, whereas 20-25% in other single countries like Japan, Korea, China. Its expense ratio is 1.49%.

2005's Top 10 ADRs

In a past posting we discussed how American Depository Receipts (ADR)
of foreign companies could be a good investment tool especially keeping
diversification in mind.

According to data from Morningstar Inc., the Top 10 percentage ADR
gainers in the first half of 2005 through June 27 (including only those
ADRs in the top 10% of volume leaders) are:
1. Internet Initiative Japan (IIJI)
2. Petroleo Brasileiro SA, Brazil (PBR)
3. Korea Electric Power, South Korea (KEP)
4. ABB Ltd, Switzerland (ABB)
5.Taiwan Semiconductor Manufacturing, Taiwan (TSM)
6. United Microelectronics, Taiwan(UMC)
7. Royal Dutch Petroleum, Sweden (RD)
8. America Movil SA, Mexico (AMX)
9. BP PLC, UK(BP)
10. Nokia Corp., Finland (NOK)