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Rating:Professor-Powered ETFs Don't Always Score an 'A' Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, September 13, 2010

Professor-Powered ETFs Don't Always Score an 'A'

News summary by MFWire's editors

In an article over the weekend, the Wall Street Journal's Ian Salisbury takes a look at some of the exchange-traded funds (ETFs) shaped by prominent figures from academia.

Salisbury writes: "But while market research by these scholars has helped shape how firms design hundreds or thousands of portfolios, the particular investments created by the academics themselves haven't always performed well."

The WisdomTree LargeCap Dividend Fund, for example, has negative average annual returns of eight percent over the past three years.

"It's no secret they were hurt by the financial meltdown," Wharton School professor Jeremy Siegel, a senior investment strategy advisor and director at WisdomTree Investments [see profile], tells Salisbury. "It's been a very hard period" for those stocks, he adds.

Salisbury notes that housing investments designed by Yale economist Robert Shiller also have not done well. Shiller helped start MacroMarkets LLC [see profile]

Meanwhile, Yale's Geert Rouwenhorst, whose work serves as the foundation for SummerHaven Investment Management LLC's strategy, and MIT economist Andrew Lo, who had a hand in the design of the ProShares Credit Suisse 130/30 ETF, "could be en route to better results," Salisbury writes. 

Edited by: Armie Margaret Lee

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