Best And Worst ETF Tickers


Picking catchy tickers isn't only exclusive to ETFs. Companies have picked interesting tickers for their stocks for years. For example, DNA was Genentech's ticker before the company was bought by Roche in 2009. TINY, the ticker for nanotech venture capital specialist Harris 'amp; Harris Group, is another great example.

In the ETF world, one of the first funds to really hit it out of the ballpark with a catchy ticker was "MOO," Van Eck Global's Market Vectors Agribusiness ETF (NYSEArca:MOO). I can still remember all the buzz that MOO created in the financial community when it launched back in 2007.

It appears, for better or for worse, that the pursuit of cleverness is heating up. According to a recent Wall Street Journal article, issuers are increasingly scrambling to come up with catchy tickers because so many have already been taken or reserved.

That makes sense. But the problem is many tickers are starting to sound like issuers trying to stretch their imaginations, and some sound too clever or plain silly-at least to my ears.

When I think of silly or ridiculous ETF tickers, one that immediately comes to mind is "KROO," the symbol for the IndexIQ Australia Small Cap ETF (NYSEArca:KROO). Yes, that's "KROO," as in kangaroo. That's like calling a China fund "Panda," or PNDA.

I haven't seen any studies done on the importance of tickers and how that relates to assets. Most of the focus has been on the importance of first-mover status, especially in niche sectors. My colleague Devin recently wrote a great piece about the advantages of first-mover status.

But I've always thought that having a catchy ticker can help a fund get noticed. Once noticed, assets and liquidity materialize, which begets more assets and liquidity as investors tend to pile into the most- popular and -traded ETF in a niche sector.

Dave Nadig, our director of research here at IndexUniverse, visited the same topic in a blog two years ago titled The Name Game. Dave argued good tickers do make a difference, and a big one at that.

I find myself agreeing with him when I look at funds like the Guggenheim Solar ETF (NYSEArca:TAN) and the Market Vectors Solar Fund (NYSEArca:KWT). TAN and KWT both target solar companies and have the same expense ratios and similar holdings and historical returns.

TAN launched only one week before KWT, but has over $101 million in assets, compared with KWT's $17.5 million. That means TAN has roughly six times the assets and over 85 percent of the solar ETF market for launching only one week earlier.

TAN also has more than 13 times the trading volume that KWT has. Is it really just a coincidence that TAN is easier to remember and say than KWT? By the way, while we're on the subject of cleverness-"KWT" is short for kilowatts.

I saw a similar correlation between clever tickers and success in asset gathering when I compared the First Trust ISE Global Wind Energy Fund (NYSEArca:FAN) and the PowerShares Global Wind Energy Portfolio (NasdaqGM:PWND).

FAN launched only two weeks before PWND, but has $29 million in assets, or roughly twice the assets of PWND. FAN also has more than double PWND's trading volume.

But enough about those clever tickers, let's talk about some more MOO, a virtual money magnet if ever there was one.

MOO now has $6.1 billion in assets, a beast of a fund. While MOO was certainly the first equity-based agriculture fund to launch, did anyone even know there was CRBA, or the Jefferies TR/J CRB Global Agriculture Equity Fund (NYSEArca:CRBA)? CRBA was another agriculture fund with similar holdings to MOO that recently closed due to insufficient assets and investor interest.

What about the PowerShares Global Agriculture Portfolio (NYSEArca:PAGG), which also has similar holdings and returns to MOO? PAGG launched a year after MOO but has only $115 million in assets. First-mover status is certainly at play here, there's no denying that. But if you were given three tickers to look at-MOO, PAGG or CRBA-which one would you look at first?

Now I don't want to place too much emphasis on tickers and assets, since there are plenty of funds with catchy tickers that aren't successful.

But given two similar funds, like in the examples I've shown above, I think an argument can be made that when you're a first mover and also have a catchy and likable ticker, it's just that much more golden.

Nevertheless, here are my lists. Note:These are not necessarily good or bad funds. The list is solely based on ticker symbols, nothing else.

Top 10 Silliest Tickers

10. GLTR (ETFS Physical Precious Metals Basket Shares) - Glitter? I see the cleverness here, but it just seems a bit over the top.

9. DIRT (iPath Pure Beta Agriculture ETN) - Why would you name your fund "dirt," even for an agriculture fund?

8. KOLD (ProShares UltraShort DJ-UBS Natural Gas Fund) - Cold with a K? Enough said about this one.

7. WSTE (Global X Waste Management ETF) - I understand why WSTE makes sense for this fund, but do you really want to name your fund "waste?"

6. CRUD (Teucrium WTI Crude Oil Fund) - Forcing the word "crude" into four letters just doesn't have the same meaning, does it?

5. FAD (First Trust Multi Cap Growth AlphaDEX Fund) - Is this fund just a fad, expected to wither away soon?

4. FONE (First Trust Nasdaq CEA Smartphone Fund) - Phone with an F? Again, enough said.

3. CARZ (First Trust Nasdaq Global Auto Fund) - Am I watching a bootlegged Disney-Pixar movie here?

2. VROM (Global X Auto ETF) - Even worse than CARZ.

1. KROO (IQ Australia Small Cap ETF) - Seriously, kangaroo?

Top 10 Best Tickers

10. FRAK (Market Vectors Unconventional Oil 'amp; Gas Fund) - Short for hydraulic fracturing, or "fracking." FRAK just launched on Wednesday.

9. VEGI (MSCI Global Agriculture Producers Fund) - No, this is not a fund for vegetarians, but a global agriculture fund similar to MOO. VEGI just launched a few weeks ago.

8. CPI (IQ Real Return ETF) - Catchy and easy to remember. The Consumer Price Index measures inflation, and this fund seeks to hedge against inflation, so it also makes sense.

7. IAU (iShares Gold Trust) - AU is gold's symbol on the periodic table of elements. Stick the "I" in front and you get an iShares exclusive gold ETP.

6. DOG (ProShares Short Dow30) - If this was a long fund, it would be the worst ticker ever. But being a short fund, it works.

5. OIL (iPath S'amp;P GSCI Crude Oil TR ETN) - I'm sure this was a highly coveted ticker. Kudos to Barclays for capturing this one and launching it back in 2006.

4. CORN (Teucrium Corn Fund) - Simple and clear as to what the fund is about. I'm sure this one was also a highly coveted ticker.

3. FAN (First Trust ISE Global Wind Energy Fund) - A lot cooler to say and remember than PWND.

2. TAN (Guggenheim Solar ETF) - I guess people prefer tans over kilowatts.

1. MOO (Market Vectors Agribusiness ETF) - Brilliant. Not only was it the first agriculture fund to launch, but with a ticker like MOO, who wouldn't want to talk about it, if not to just say MOO over and over again?

Disclosure:I am currently long TAN.

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Copyright ® 2012 IndexUniverse LLC . All Rights Reserved.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , ETFs

Referenced Stocks: FAN , KROO , KWT , MOO , TAN



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