Stock Picker

Want to Day Trade the Indexes?

Stock Picker

With the huge success of WEBS, Barclays Global Investors recently filed with the SEC to offer 51 open-end domestic index funds. They are revolutionary new products for index investors allowing them to day trade almost all U.S. indexes.

These index funds would be commonly referred to as exchange-traded mutual funds. They are similar to the Spiders, Diamonds and WEBS (managed by Barclays) that trade on the AMEX. While Spiders are structured like a unit investment trust, Barclays new index funds are structured like WEBS and Select Sector Spiders. They will:

  • trade on the AMEX like a single stock
  • be priced and traded throughout the day
  • allow for margin buying
  • allow for short-selling
  • be tax-efficient as stock turnover is low

Investors with general nervousness about the market might find comfort in the fact that it is easy to get it in and out of the market using these instruments. But this is not typical of index investors who tend to invest for the long-term.

Barclays filed for SEC approval on April 30th, 1999, but does not anticipate product availability until next year. Since Barclays is going through the "quiet" period, they cannot disclose any further information or conduct any promotional activity for their funds. The expenses and fees are not listed in the filing but are likely to be low as typical of domestic index funds.

Below is a list of the indexes that they plan to track. It seems quite surprising that they have not included a fund for the Wilshire 5000 Index, which is slowly becoming the universal benchmark for U.S. stock mutual fund performance.

Dow Jones Broad Market Index - Small Cap, Mid Cap, Large Cap and Total Market.

Dow Jones Broad Sector Index - Basic Materials, Consumer Cyclical, Consumer Non-cyclical, Energy, Industrial, Technology and Utilities.

Dow Jones Industrial Sector Index - Chemicals, Internet, Health Care, Real Estate, Financial Services, Petroleum, Technology, Transports and Utilities.

S&P Index - S&P 100, S&P 500 Index, S&P 500/BARRA Value, S&P 500/BARRA Growth, MidCap 400, MidCap 400 BARRA Value, MidCap 400/BARRA Growth, SmallCap 600, SmallCap 600/BARRA Value, SmallCap 600/BARRA Growth, Super Composite 1500, Super Composite 1500/BARRA Value, and Super Composite 1500/BARRA Growth.

Russell Index - 1000, 1000 Growth, 1000 Value, 2000, 2000 Growth, 3000, 3000 Growth, 3000 Value, Top 200 Index and MidCap Index.

International Index - S&P/TSE 60, S&P Euro, S&P Euro Plus, DJ Global Pharmaceuticals Sector, DJ Global Media Sector, and DJ Global Telecommunications Sector.

Barclays Global Investors is the leader in quantitative investment strategies. They were the pioneers of institutional index investing with the introduction of the worlds first index fund twenty-five years ago. Barclays Global Investors is a subsidiary of Barclays Bank, which ranks second to HSBC in the United Kingdom.

Barclays has also applied to the SEC for approval to launch 11 new country WEBS. The managers hope to introduce at least five of these by year-end.