index funds

Individual Investor Group Launches Large- and Mid-Cap Indexes

index funds

Individual Investor Group announced two new additions to the America's Fastest Growing Companies index family: the LargeCap 50 and the MidCap 300.

The LargeCap 50 starts off with a base of the 100 largest companies and selects the 50 with the highest earnings-per-share (EPS) growth. The MidCap 300 focuses on companies with market caps between $2 billion and $20 billion. Like all indexes in the series, the indexes rebalance each quarter by screening for EPS growth, slashing the bottom 10%, and replacing them with new companies that meet the initial selection criteria.

Individual Investor Group inked a license agreement with Nuveen Investments in October to launch an exchange-traded fund (ETF) based on the America's Fastest Growing Companies Index (ticker symbol: NDI). The index is comprised of approximately 500 small-cap growth companies. The ETF will trade on the American Stock Exchange, pending regulatory approval.

The chart below shows the performance of NDI (since inception) vs. the Russell 2000 index.


Source
: Reuters
[/:Author:]

NDI vs. the Competition
Index
1 mo. return
3 mo. return
YTD return
1 yr. return
NDI
-15.95%
-4.75%
-8.90%
-28.92%
Russell 2000
-6.56%
6.75%
-1.69%
-16.84%
Russell 2000 Growth
-13.71%
-1.02%
-6.73%
-40.76%
S&P SmallCap 600
-6.10%
9.98%
-2.08%
-0.36%
Nasdaq 100 Tracking Stock (QQQ)
-26.36%
-24.82%
-18.89%
-55.75%

 

Source: Morningstar, Reuters            *all data as of 2/28/2001

The ETF Game

In an effort to promote its Portfolio Prodigy ETF education program, PlanSponsor.com is holding an investment competition to kick off in April. Over a four-month period, individual plan sponsors, consultants, and other investment professionals get to play with $30 million of fantasy money. Contestants will use the program to construct a portfolio of ETFs and attempt to best their peers.

Winners will be judged on the highest return for each month and every four months. Although contestants will play with fantasy money, PlanSponsor.com said it will give away over $30,000 in real prizes to the winners.

The Portfolio Prodigy Program was developed in consultation with Standard & Poor's (S&P) to educate institutional investors on ETFs.

Combined assets of the 82 ETFs tracked by Investment Company Institute totaled $64.3 billion in February, according to the trade group's most recent report.

European Enhanced Index Funds

Merrill Lynch said it is set to launch a series of enhanced index funds for European institutional investors.

"Enhanced index investment is already well established in the U.S. and continues to grow in popularity there," said Peter Gibbs, head of Merrill Lynch in Europe, the Middle East, and Africa. "These funds will allow European institutions to enjoy the low risk profile of a conventional index tracker but benefit from intelligent exploitation of the market anomalies that persist in indices across the world. We think they're going to prove very attractive to clients considering a passive approach to managing their portfolios."