Sail Boat

News Roundup: Nasdaq ETF; Barclays & Vanguard Distributions

Sail Boat

The Nasdaq Exchange is looking to capitalize on the popularity of the Nasdaq-100 Tracking Stock (QQQ), an exchange-traded fund listed on the American Stock Exchange (AMEX). Nasdaq has plans to launch its own ETF based on the Nasdaq Composite Index, according to John Jacobs, head of Nasdaq Financial Products Services.

Given the success of the Nasdaq-100 "cubes," which hold over $22 billion in assets, Nasdaq believes a broader version of QQQ could attract significant interest from institutional and retail investors. However, Jacobs indicated a Nasdaq composite ETF is not designed to be a direct competitor to the existing QQQ. He pointed out that the Nasdaq 100 index does not contain many small-caps, initial public offerings (IPOs), and financial stocks traded on Nasdaq. Currently, over 4,000 companies trade on the exchange, and according to Jacobs, the Nasdaq 100 covers 70% of the exchange's total market capitalization. Jacobs could not comment on potential candidates to manage the ETF.

Although it remains to be seen whether a composite Nasdaq ETF will siphon assets from QQQ, the move underscores the growing competition in trading ETFs. The AMEX has continued to develop ties with foreign exchanges in an effort hasten global ETF expansion, while the New York Stock exchange has cross-listed several popular AMEX-traded ETFs.

Zero Capital Gains Distributions for iShares

Barclays Global Investors (BGI) announced zero capital gains distributions in 2001 for all of the domestic and 11 of the international iShares. Barclays manages domestic ETFs tied to broad style indices from S&P/Barra and Russell, as well as a family of sector iShares hitched to benchmarks that cover thin U.S. market slices.

"Tax efficiency is one of the main advantages of iShares, and we're focused on continuing this year's success," said J. Parsons, head of sales for BGI's individual investor group. Among the international iShares with no capital gains distributions this year are the broad international MSCI EAFE iShares, which were launched with much fanfare in August. According to Parsons, MSCI EAFE iShares assets have already climbed to $812 million.

Vanguard Fund Distributions

The Vanguard Group released capital gains distributions for the following funds as of 12/13/2001:

Vanguard Fund

Income per Share

Windsor Fund Investor

$0.089 SA

Windsor Fund Admiral

$0.305 SA

Wellesley Income Fund Investor

$0.285 Q

Wellesley Income Fund Admiral

$0.70 Q

Energy Fund Investor

$0.40 A

Energy Fund Admiral

$0.76 A

Health Care Fund Investor

$0.91 A

Health Care Fund Admiral

$0.39 A

Precious Metals Fund

$0.29 A

PRIMECAP Fund Investor

$0.26 A

PRIMECAP Fund Admiral

$0.275 A

Equity Income Fund Investor

$0.14 Q

Equity Income Fund Admiral

$0.31 Q

International Growth Investor

$0.24 A

International Growth Admiral

$0.795 A

Capital Opportunity Investor

$0.07 A

Capital Opportunity Admiral

$0.17 A

Inflation-Protected Securities

$0.075 Q

Q=quarterly, SA=semi-annually, A=annually Source: The Vanguard Group