Nasdaq introduces BLDRS family of exchange-traded funds
By Our Markets Bureau | 14 Nov 2002
New
York: Nasdaq Financial Products Services, a wholly-owned
subsidiary of the Nasdaq Stock Market, is introducing
BLDRS, a new family of exchange-traded funds (ETFs) based
on the Bank of New York ADR Indexes.
The BLDRS funds are the first ETFs listed on Nasdaq and the first ETFs based on depositary receipts (DRs). The Bank of New York will serve as trustee and index provider. In honour of the launch, Bank of New York chairman Thomas A Renyi joined Nasdaq Chairman Wick Simmons at MarketSite in Times Square to open Nasdaq trading today at 9.30 am ET.
BLDRS funds hold a portfolio of depositary receipts that can be bought and sold throughout the trading day similar to shares of stock. The BLDRS funds enable investors to purchase a basket of depositary receipts with one simple and cost-effective transaction, as each BLDRS fund has its ordinary expenses capped at 0.30 per cent.
We believe these one-of-a-kind financial products, the first-ever Nasdaq-listed exchange-traded funds, will provide an investment opportunity to individuals or institutional investors looking to add an international component to their portfolio mix, says Simmons. The BLDRS funds are an example of Nasdaqs continuing innovation in, and support of, new financial products.
A BLDRS fund offers the advantage of access to a depositary receipt index with the ease of stock trading. Investors will be able to purchase shares on margin, short sell shares, or hold for the long term. In addition, shares can be purchased throughout the trading day at intra-day prices.
Thomas A Renyi, chairman and chief executive officer of the Bank of New York, says: As demonstrated by its development and sponsorship of QQQ, the most actively traded ETF in the world, Nasdaq Financial Products Services is a leader in this area. We are pleased they are sponsoring the BLDRS funds, which are based on the Bank of New York Indexes. The introduction of the BLDRS fund family underscores the Bank of New Yorks prominence in both the exchange-traded fund servicing and depositary receipt markets.
Joseph M Velli, senior executive vice-president of the Bank of New Yorks worldwide securities processing services sector, says: As the worlds largest depositary for depositary receipts, we are delighted to be associated with an ETF that offers investors another innovative solution as they continue to globalise their portfolios. The BLDRS fund family broadens the advantages and enhances the visibility of depositary receipts as a convenient and cost-effective way to invest in non-US securities.
More than half the worlds equity market is based outside the US and the BLDRS funds enable investors to purchase international securities in one simple and cost effective transaction, says John L Jacobs, chief executive officer of Nasdaq Financial Products Services.