ETF Trivia Answers

Yesterday, I posted my ETF Trivia questions. Today, I provide the answers.

1. What was the second ETF (exchange-traded fund) launched?

Correct answer is b) SPDR S&P Midcap (MDY), which was launched in May 1995, about 27 months after the first ETF. Dow Diamonds did not arrive until January 1998, and the “Cubes” did not launch until March 1999. (Disclosure: I am long QQQQ).

2. In what year was the second ETF launched?

Correct answer is b) 1995 (see explanation above). There were no new ETFs introduced in 1994.

3. How many US listed ETFs and ETNs were there at the beginning of the new millennium (1/1/2000)?

Correct answer is a) 32. Although the ETF business began in 1993, it didn’t start to hit its stride until this decade. The 132nd ETF was launched in November 2002, and it took until December 2005 for the count to reach 232. (Note: these last two numbers are not adjusted for ETF closures that happened prior to those dates.)

4. When was the first bond ETF launched?

Correct answer is a) July 2002, which was the launch of three treasury and one corporate bond funds from iShares: SHY, IEF, TLT, and LQD. November 2002 was the launch of the now defunct FITR family of treasury ETFs.

5. What was the brand name of the first family of ETFs with an international focus?

The correct answer is c) WEBS – World Equity Benchmark Series. This family launched 17 single-country ETFs in March 1996, making them the 3^rd- 19^th ETFs to arrive on the scene. You now know them as iShares MSCI Australia (EWA), iShares MSCI Canada (EWC), and 15 more with ticker symbols starting with the letters “EW”. The BLDRS international ETFs did not launch until November 2002.

At the time of the WEBS launch, 100% of the ETF products were named either SPDRS or WEBS, so I went and grabbed the SPDRWEBS domain name (which I still own today if anyone is interested in acquiring it).

6. When was the first ETN (exchange-traded note) launched?

Correct answer is c) 2006, making ETNs a relatively young product. The first two were iPath DJ-UBS Commodity Total Return ETN (DJP) and iPath S&P GSCI Total Return Index ETN (GSP), launched in November 2006.

7. When were the first leveraged and inverse ETFs launched?

The correct answer is b) June 2006 with the introduction of the first seven ProShares: Ultra Dow30 (DDM), Short Dow30 (DOG), Ultra MidCap400 (MVV), Short MidCap400 (MYY), Short QQQ (PSQ), Short S&P 500 (SH), and Ultra S&P 500 (SSO). The first leveraged “mutual fund” came 13 years earlier with the launch of Rydex Nova (RYNVX) in July 1993.

8. How much time elapsed between the initial filing of the first leveraged ETF and its launch?

Correct answer is c) ~4 years. The ProShares (under the name ProFunds) original filing is dated June 5, 2002. This is one of the reasons that I do not pay much attention to new ETF filings. Another reason is that many of those filings never result on actual products being launched.

9. When was the first ETF delisting?

Correct answer is c) December 2002 when the first three ETFs bit the dust. Most of you probably don’t remember iShares DJ US Chemicals (former ticker IYD), iShares DJ US Internet (former ticker IYV), and iShares S&P/TSE 60 (former ticker IKC). Thus, the need for ETF Deathwatch was born.

10. What was the age of the “youngest” ETF to delist?

Correct answer is a) Less than 3 months, and NETS FTSE-CNBC Global 300 Index Fund (former ticker MYG) holds that honor. Launched 11/13/08, it was part of the massive NETS closure on February 9, 2009. The answer c) 3 years, 8 months, was the age of PowerShares High Growth Rate Dividend Achievers Portfolio (former ticker PHJ), the oldest ETF to ever meet its demise.

11. When was the 1,000^th ETP (ETFs and ETNs combined) launched?

Correct answer is b) November 2009, and was highlighted in an article earlier this month.

12. Which of the following ETF brands are defunct?

Correct answer is n) All of the above:

• WEBS are now known as iShares.
• The streetTRACKS brand was dropped in favor of SPDRS.
• FITR Treasury ETFs arrived on the scene in November 2002 and left May 2005.
• HealthShares bit the dust in 2008, shortly after the inaugural issue of ETF Deathwatch.
• AirShares, brought to you by the same people behind HealthShares, lasted almost eight months.
• The NETS family of international index ETFs met their untimely demise early in 2009.
• Ameristock Ryan ETFs appeared in July 2007 and disappeared in June 2008.
• Adelante Real Estate ETFs were the first group of ETFs from the HealthShares/AirShares people to go under in July 2008.
• Opta was the brand name of the Lehman Brothers ETNs that blew up when Lehman declared bankruptcy. Many holders did not understand what ETNs were or the fact that they are unsecured.
• FocusShares had four ETFs for about 11 months but closed up shop in October 2008.
• SPA MarketGrader ETFs met their demise in March 2009.
• BearLinx was the brand of Bear Stearns (remember that company?) that sponsored ETNs.
• Fortune was one of the early ETF brands on the scene. Fortune e-50 (former ticker FEF) arrived in October 2000 and closed in December 2003. Another product, the Fortune 500 ETF (former ticker FFF) was renamed streetTRACKS Total Market ETF (TMW) on 6/13/05 only to be renamed again to SPDR DJ Total Market (TMW), thus becoming the first ETF to survive two brand eliminations.

How well did you do?