Funds track indexes in Australia, Germany, France, U.K., Japan and H.K.. Northern Trust's asset-management divison Northern Trust Global Investments (NTGI) has barreled into ETF business with the recent launch of six "NETS" funds that are intended to provide U.S. investors with exposure to international stock indexes.

NETS stands for Northern Exchange Traded Shares.

"This is a breakout initiative for us," says Frederick Waddell, CEO of Chciago-based Northern Trust. "ETFs have become increasingly popular with investors, and we are confident that NETS will be a great addition to our investment product offerings."

The first wave of ETFs in the NETS family track Hong Kong's Hang Seng, Japan's TOPIX, France's CAC 40, the FTSE 100, the German DAX and the Australian S&P/ASX 200.

Vast quantities

"Prior to the NETS launch, U.S. investors were unable to gain ETF-based exposure to some of the world's most widely accepted international benchmarks," says NETS' head Peter Ewing. "These benchmarks have vast quantities of investment capital tied to their performance. Now, investors in the U.S. can access them here too."

In January 2007, New York-based ETF manager XTF launched a series of "Country Rotation" portfolios. XTF weighs the overall risk and return characteristics of 13 countries -- the Netherlands, Germany, France, Switzerland, Italy, the U.K., Belgium, Australia, Singapore, Hong Kong, Japan, Canada and South Africa -- using a proprietary methodology to trigger a "buy" or "sell" on each country. A "buy" means an allocation of country-specific equity ETFs for that sleeve; a "sell" results in an allocation of U.S. fixed-income.

But XTF has gone out of business.

A couple of months ago, Northern Trust launched a "socially responsible" fund -- not an ETF apparently -- that tracks the KLD Global Sustainability Index across 24 developed markets.

ETFs can be less expensive, more liquid and less susceptible to turnover than mutual funds.

Northern Trust says it plans to roll out more NETS funds "in the coming weeks and months.

NTGI is the trading name for whole stack of invest-management units connected with Northern Trust-owned businesses.

Northern Trust had $757.2 billion in assets under management at the end of 2007. -FWR