Three ETFs Begin Trading on Big Board


Three prominent exchange-traded funds (ETFs) began trading on the New York Stock Exchange (NYSE) on Tuesday, July 31 - the Nasdaq-100 Tracking Stock (QQQ), SPDR 500 (SPY), and Diamonds (DIA). They managed to attract 11%, 20%, and 29% of trading for the day's market share, respectively, according to the Wall Street Journal.

Abandoning a decade-long stance against unlisted trading privileges, the Big Board embarked on an effort to win a share of ETF trading with a recent announcement that it would begin unlisted trading of some ETFs.

FTSE iShares

Barclays Global Investors (BGI) said it will launch two new iShares based on pan-European indexes from London-based index provider FTSE. Actually, BGI will change the benchmark for the existing iFTSE ExUK ETF to the FTSE Euro 100. According to BGI, the impetus for the switch is growing demand from investors for strict exposure to only Eurozone countries. The rebranded fund will exclude companies domiciled outside the Eurozone and will be priced in euros, and will continue to trade on the London Stock Exchange (LSE).

Additionally, later in 2001 BGI will introduce an ETF based on the FTSE Eurotop index, a diversified benchmark of pan-European blue chips. The new ETF will trade on the LSE and the Euronext exchange.

New Commodity Index Futures

The Chicago Board of Trade (CBOT) announced it will launch a futures contract on the Dow Jones-AIG Commodity Index (DJ-AIGCI) sometime in the fourth quarter of 2001 on its electronic trading platform. The contract will be cash settled and will provide investors with a tool to hedge commodity and inflation exposure.

"The Dow Jones-AIG Commodity Index opens the door of opportunity for investors to this unique asset class," said Peter R. Kann, chairman and CEO of Dow Jones. "The index methodology weights 20 commodities both by investor interest - as measured by trading volume in futures contracts of the index's component commodities - and by production. The result is an index that is not skewed toward one commodity and yet clearly distinguishes between major and minor commodities."