Nasdaq plans exchange-traded fund based on composite index
By Our Markets Bureau | 05 Mar 2003
Bloomberg:
The Nasdaq Stock Market, the second-largest US stock exchange,
will introduce options, futures and an exchange-traded
fund based on its composite index, seeking to find new
products as trading volume and fee-revenue shrink.
The new products, coming later this year, will add to Nasdaqs existing offerings tied to its Nasdaq 100 Index, which consists of 100 of the largest non-financial companies listed on the exchange, says John Jacobs, executive vice-president for financial products. The composite index includes more than 3,500 stocks.
The Nasdaq Composite is one of the most widely followed benchmarks anywhere, Jacobs says. Were going to roll out derivatives first, index futures and index options. Jacobs adds that the products will be backed by a partner he declined to name. He wouldnt say when they will be launched.
Nasdaq introduced its first exchange-trade fund four years ago based on its 100 Index. Exchange-traded funds buy and sell shares on exchanges throughout the day. Investors can create new shares by exchanging the underlying stocks, or liquidate them by receiving the stocks.
The Nasdaq fund, known by its ticker symbol QQQ, has $16.1 billion in shares outstanding. It is the second-largest exchange-traded fund after the $33.8 billion SPDR Trust, which is based on the Standard & Poors 500 Index.
New York-based Nasdaq also licensed its index of biotechnology companies for use by Barclays Global Investors, a unit of Barclays Plc, for an exchange-traded fund in 2001.
