The Legacy and Evolution of the World Equity Benchmark Series (WEBS)
The World Equity Benchmark Series (WEBS) was a groundbreaking international fund that first traded on the American Stock Exchange in 1996. Initiated by Morgan Stanley, WEBS blended elements of both open-end and closed-end fund structures, offering a unique investment model.
In the year 2000, this pioneering fund underwent a transformation, adopting a new name: iShares MSCI Emerging Markets Exchange Traded Fund (ETF). The rebranded fund aims to mirror the investment outcomes of the MSCI Emerging Markets Index, encompassing large- and mid-cap stocks from emerging markets.
Key Highlights
- The World Equity Benchmark Series (WEBS) was rebranded to iShares MSCI Emerging Markets ETF in 2000.
- The ETF tracks the MSCI Emerging Markets Index, which includes sizable and mid-sized corporations from burgeoning global markets.
- Similar in structure is the SPDR S&P 500 Trust ETF, managed by State Street Global Advisors, which follows the S&P 500 index.
Unpacking the World Equity Benchmark Series (WEBS)
A closed-end fund is a publicly traded investment capable of raising a predetermined amount of capital through an initial public offering (IPO). The amassed funds are subsequently listed as shares on a public exchange, forming a specialized stock portfolio with a fixed number of shares. Conversely, an open-end fund represents a mutual fund that pools investor money to invest in stocks and bonds, sharing profits and losses proportionately among its investors.
Institutions utilizing WEBS owned a corresponding portion of the securities traded on MSCI country indexes, aligned proportionally to their initial capitalization or investment. The distinctive feature of WEBS was its capability to be bought, sold, and traded much like regular stocks, providing investors with a versatile tool for achieving global diversification.
WEBS offered exposure to an array of international markets, including Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia, Mexico, the Netherlands, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.
Renaming WEBS to iShares MSCI Emerging Markets ETF was part of a broader strategy to consolidate ETF branding under Barclays Global Investors, now managed by BlackRock. The comprehensive lineup included iShares dedicated to countries such as Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia, Mexico, the Netherlands, Singapore, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.
iShares MSCI Emerging Markets ETF and SPDR S&P 500 Trust: A Comparison
The iShares MSCI Emerging Markets ETF closely mirrors the function of the SPDR S&P 500 Trust, an exchange-traded fund (ETF) overseen by State Street Global Advisors that replicates the S&P 500 index. Originally named the Standard & Poor’s depository receipt, it was commonly known as SPDR or simply
Related Terms: closed-end fund, open-end fund, exchange-traded fund, MSCI Indexes, SPDR S&P 500 Trust
References
- iShares. “iShares MSCI Emerging Markets ETF”.
- MSCI. “US Exchange Traded Funds Based on MSCI Indices Launched by Barclays Global Investors”.
- State Street Global Advisors. “SPDR® S&P® Dividend ETF”.
