No great ETF for plays on exchanges

Posted by: Aaron Pressman on November 29, 2006

Commenter Eli Nahass asks, after reading a recent post about the booming market for derivatives exchanges, if there are any ETFs that invest primarily in such shares. The answer is, I’m afraid, not really.

You can see which ETFs hold a big position in a stock by looking on the stock’s “components” page on Yahoo Finance. For example, the Chicago Board of Trade (Symbol: BOT) isn’t listed in the top 10 holdings of any ETF. It went public just over a year ago so maybe that’s not surprising. Cross-town rival Chicago Mercantile Exchange (CME) checks in at 5% of the iShares Dow Jones U.S. Broker-Dealers ETF (IAI) and an unspecified percentage of the streetTRACKS KBW Capital Markets ETF (KCE). ETFconnect.com, another good source of ETF info, says KCE holds almost 6% of its assets in the CME. But both of those ETFs are primarily owners of big brokerage companies like Goldman Sachs (GS) and Merrill Lynch (MER).

The New York Stock Exchange (NYX) is listed as a top 10 holding only in the First Trust IPOX-100 Index ETF (FPX), which essentially buys shares of major IPOs on the seventh day after they go public and holds them for a set period of 1,000 days. The New York Mercantile Exchange (NMX), which had its heady debut just the other day, isn’t yet a major holding in any ETF. So no holiday ETF cheer for derivatives exchanges, Eli.

Reader Comments

Roger Nusbaum

November 30, 2006 11:58 AM

I think this makes a great point. Despite the roughly, ahem, 237,000 ETFs listed in the last few months there are plenty of narrow themes that either have not or cannot be isolated in ETFs.

Another one might be video game makers as a long term demographic play-think about someone who is 25 today, they are likely to be a buyer of video games for personal use when they are 50. No position in this theme yet.

Sam in Texas

May 10, 2010 4:52 PM

I agree with NURREDIN and Vince. Let's face it, Facebook has yet to come up with a business model that is actually unique to SNS. Instead, they are parroting the Google advertising strategy, and the ultimate path there is to somehow out-Google Google as a search tool, which is just a bad idea. Plus, Google itself is kind of a sham, since they used their IPO to gobble up companies that actually made money to buffer their bottomline.

Ultimately, Facebook is the China promise: a bunch of people, and if you could just get a dollar out of each person, then you'd be rich. But, like China, you don't have a lot of people who want to give you a dollar, or might not even have it.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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