Coincidence? ETFs With Memorable Tickers Performing Well in 2013
More than likely, it is just a unique coincidence, but some ETFs with memorable tickers are performing quite well this year. By "memorable," we mean those ETFs that use tickers that are actual words.
While there is no empirical evidence to suggest easy-to-remember ETF tickers result in long-term outperformance for the underlying funds, tickers are an integral part of ETF marketing, particularly with new ETFs.
Indeed, what is being seen with select ETFs that sport memorable tickers this year is probably just a collection of coincidences. However, there is no getting around the fact that some of these funds are outpacing comparable rivals in noticeable fashion. Just look at these examples.
PowerShares DWA Emerging Markets Technical Leaders Portfolio (NYSE: PIE)
It can be argued that the PowerShares DWA Emerging Markets Technical Leaders Portfolio has the best ticker of any ETF out there, though the "grabbing a slice of PIE" jokes wear thin after a while. Still, PIE has stood tall in what has been a dismal year for many diversified emerging markets ETFs.
The reality is the ticker is not the secret to PIE's success. The relative strength component to the Dorsey Wright Emerging Markets Technical Leaders Index is. While rival ETFs have been dragged down by their exposure to the BRIC countries, South Africa and South Korea, PIE's relative strength methodology has kept investors involved with the strongest emerging markets.
Translation: Indonesia, Thailand, Turkey and the Philippines combine for about 47 percent of PIE's weight. The ETF is up nearly 11 percent this year compared to a 5.7 percent decline for the iShares MSCI Emerging Markets Index Fund (NYSE: EEM).
WisdomTree MidCap Dividend Fund (NYSE: DON)
Investors can have some with the WisdomTree MidCap Dividend Fund by referring to it as "The DON" or "DON Corleone." Or they can simply enjoy the fact that DON provides perhaps the most credible option among U.S.-focused ETFs for income investors that want mid-cap exposure.
DON, which has $578.2 million in assets under management, devotes a quarter of its weight to financials. Utilities, discretionary and industrial names combine for another 47 percent of the ETF's weight.
More importantly, DON has outperformed the SPDR S&P MidCap 400 ETF (NYSE: MDY) by 310 basis points this year while being 200 basis points less volatile.
PIMCO Total Return ETF (NYSE: BOND)
How another ETF issuer did not get their hands on BOND as a ticker before PIMCO did is baffling. The memorable ticker is merely another feather in the BOND's cap and one the ETF does not need, particularly when it is often referred to as the Bill Gross ETF.
BOND is not yet 14 months old, but in the past year the ETF has hauled in more than $5 billion in assets to become the largest actively managed ETF and has returned 10.7 percent. None of that has to do with the ticker, but hey, it is a good marketing tool.
To be fair, there is ample evidence that memorable tickers do not always help ETFs and ETNs in terms of returns. This year, it is commodities ETFs and ETNs that support that assertion. Agriculture commodities funds are among the most egregious offenders. The Market Vectors Agribusiness ETF (NYSE: MOO) is sporting a small year-to-date loss, but the iPath DJ-UBS Livestock TR Sub-Index ETN (NYSE: COW) and the Teucrium Corn Fund (NYSE: CORN) are both lower by 10 percent.
Stretching to call this one "nugget," the Direxion Daily Gold Miners Bull 3X Shares (NYSE: NUGT) has been locked in a death spiral that shows no signs of abating. NUGT's April 2 reverse split boosted the shares to $26. Today, NUGT languishes below $11.
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