In a bid to bring foreign stocks closer to the United States through ETFs, iShares has filed with the SEC to create two new funds dedicated to overseas financial companies. The new funds will be the first of their kind, but will hope to follow in the footsteps of popular US-based financial ETFs trading on the NYSE.

The iShares MSCI Europe Financial Sector Index Fund will track a composition of stocks very much like its underlying index, which is comprised of 105 companies in 15 different European countries, according to the prospectus. The fund makes no distinctions by the size of the financial institution, indicating that iShares is hoping to create a broad based index ETF, rather than pinpoint a niche within the European markets.

The iShares MSCI Far East Financial Sector Index Fund will work differently than its partner fund, opting to utilize a sampling of stocks to derive similar performance results as its underlying index, according to the prospectus. The underlying index contains 93 different banks, insurance and real estate companies in three different Asian countries, including Hong Kong, Japan and Singapore.

A relatively unknown name in the exchange-traded fund industry, Asia Tigers Fund Inc. (GRR) is boasting hefty returns while the US markets continue to stagnate. The fund, which suffers from low volume and a relatively small market cap, continues to be a top performer, showing gains of 54% year to date.

Managed by Blackstone Asia Advisors LLC, the firm is one of the best diversified of any exchange-traded fund on the market today. According to a press release, its top ten holdings represent just 23.4% of the total assets of the fund, with its biggest position in Samsung Electronics, which makes up just 4.3% of the portfolio. The fund is not only diversified by company, but also by nation. Hong Kong, South Korea, China, Taiwan and India are home to the largest portions of the fund and represent 79.3% of assets.

Recently, investors have been able to buy the fund at a discount, often as much as 7% by July 31. Very few closed end funds ever trade at such a hefty discount.

Exports around the world may be permanently docked at the port, but internal growth within Asia’s leading exporter remains strong. China, who during the 1990s and early 2000s built a budding export business, is now finding economic prosperity through producing for its own domestic consumption.

Of the handful of countries still in the positive, China is one of few to have its economic models revised upward rather than down. CNN reports that China’s growth has been upgraded by the World Bank from a 6.5% surge in GDP to 7.2%, fueled in part by improving global trade and a new generation of domestic consumption that is taking well to previous luxuries, such as the mobile phone. In May, China’s retail stores posted 15% year over year growth in spending, bucking the global recessionary trend.

Investing in China’s domestic growth is relatively easy. iShares FTSE/Xinhua China 25 Index (FXI: Quote, Profile, Advanced Chart, News), the largest Chinese ETF, tracks the 25 largest firms that trade in Hong Kong.

Based upon the first three months of 2009, the Shanghai Composite Index can be crowned as the best performing index. The index soared 30% in the first quarter alone, while its tracking ETF, Morgan Stanley China A Share Fund (CAF), posted a 49% gain.

According to Investor’s Business Daily, CAF’s growth was aided by additional investor interest in the closed-end fund, which currently trades at a 17% premium to its net asset value. Investor demand for the exchange-traded fund shows that the rally in Chinese equities is not yet over; however, other Chinese equity ETFs provided less than impressive results. The iShares FTSE/Xinhua China 25 Index (FXI: Quote, Profile, Advanced Chart, News) fell some 2% in the first quarter and iShares Hong Kong (EWH: Quote, Profile, Advanced Chart, News) posted a 1% loss.

As of September 26, 2008, the American Stock Exchange’s Cleantech Index (CTIUS) added two new companies to its portfolio while dropping three others. According to the Business Wire press release, the two companies joining the Cleantech Index are China High Speed Transmission and Autodesk, which will be replacing Xantrex, Christ Water Technologies, and Comverge. Two ETFs that track CTIUS have also been updated to reflect the change. These two ETFs are identified in the Business Wire article as PowerShares Cleantech Portfolio ETF (PZD: Quote, Profile, Advanced Chart, News) and the KSM Cleantech ETF of Israel. The Cleantech Index contains companies of many industries like water, agriculture, manufacturing and transportation. Rafael Coven, Managing Director of the Cleantech Indices, provides insight into the addition of the new companies, saying, “We chose both companies for their growth, industry leadership, impact, and track record.” In taking a closer look at the two additions to the index, Hong Kong-based China High Speed Transmission will provide an efficient connection to the wind turbine alternative energy industry through manufacturing expertise. Autodesk, on the other hand, provides engineers and architects with computer software specializing in environment-friendly solutions to projects.