Editors note: This article has been edited to remove certain lyrical content. (31/10/18)

First Trust is listing an international internet ETF to complement its massive and massively profitable $8bn US internet ETF FDN. The First Trust Dow Jones International Internet ETF (FDNI) will track an index of non-US companies that make most of their money through internet commerce and services.

The new fund starts with the S&P Global ex-U.S. Index. It then picks 40 companies from outside the US - from both developed and emerging markets - that make most of their money "from providing goods or services through the Internet," the prospectus says. Twenty companies are chosen from ecommerce, while the other twenty chosen are internet service providers.

Companies are chosen and weighted based on market capitalisation, with the biggest companies weights capped at 10%. Companies must have a market cap greater than $1 billion and a six-month median daily traded value of $5 million to qualify in the index.

Product review - The internet is really really great

Avenue Q, one of the most successful Broadway musicals of all time, has a song about the internet.

(The song is here.)

We don't use the internet for that purpose. But as things turn out, the internet is also really great for ETF providers. First Trust's original internet ETF, the $8bn FDN, listed back in 2006 tracks an index of 40 highly liquid and large US internet companies (Amazon, Google, eBay, etc.) FDN charges a massive 0.53% fee for the privilege of tracking a very simple index -- and makes a lot of money as a result. By our calculations, a 0.53% fee on $8bn of AUM comes to around $402m in revenue a year. And First Trust has managed to maintain its control of that money pile despite the fee compression going on in every corner of the ETF universe.

So how did First Trust pull this off? Well, firstly the asset growth has been huge. Since 2006, SPY has delivered a return of roughly 110% while FDN has delivered a return of almost 480% -- more than quadruple SPY. But more importantly, the success owes to First Trust being the first to take the idea that 'the internet' was a sector in its own right seriously.