Bud Fox: 10 Surprising ETF Facts

By Dan Culloton | 06-12-07 | 06:00 AM

My colleagues and I parse a lot of numbers while analyzing conventional and exchange-traded funds. Not all of the numbers make it into our published work. In the past we've shared lists of some of the more interesting mutual fund factoids we have run across. What follows is ETF statistical potpourri that will amuse, enlighten, or shock. Some of the numbers speak for themselves, others require a little explanation. Enjoy.

30%
The percentage of all domestically listed ETFs that have been launched in the last six months.

163 vs. 134
The raw number of ETFs launched in the last six months versus the number of ETFs launched in first 10 years (1993 to 2003) of the ETF business' existence.

19 of 25
LeBron James' shooting performance in NBA Eastern Conference playoff games? Not quite. More than three fourths of all bond ETFs available (19 out of 25), hit the market this year.

23 of 93
Ouch. James' shooting performance, so far, in the NBA finals? Close, but no. Of the 93 international ETFs on the market, only 23 are diversified funds that invest across a range of countries, regions, and sectors. The rest are country- or region-specific or international-sector funds.

0.67%
The average expense ratio of ETFs launched in the last six months, many of which were leveraged index funds; sector, industry, or niche funds (ophthalmology, for instance); and offerings tracking specialized or custom-made benchmarks.

0.45%
The average expense ratio of all the ETFs launched before December 2006.

$84 million
Management fees paid in 2006 by Barclays' largest ETF and the second-largest ETF in the business, the $46 billion in assets iShares MSCI EAFE Index EFA , according to its most recent Statement of Additional Information. It paid more in management fees last year than half of all ETFs currently have in total assets. At the end of May 2007, 49.6% of the more than 500 ETFs in Morningstar's database had less than $84 million in assets.

$284 billion vs. $196 billion
What my youngest sons will need to pay for college in 14 to 16 years? If so, they better be able to shoot like LeBron. No, it's Barclays' share of the ETF industry versus everybody else's.

Fore!
You better duck when a once-a-decade hack like me yells that on a golf course. Four is also the number of holdings left in the smallest ETF stock portfolio. B2B Internet HOLDRs BHH , which back in the halcyon days of the Internet craze included nearly 20 companies, now owns only Checkfree CKFR , Ariba ARBA , Agile AGIL , and Internet Capital Group ICGE (and Checkfree gobbles up more than two thirds of the portfolio's assets). The rest have succumbed to bankruptcy, delisting, mergers and acquisitions, or some combination thereof.

This dramatizes the inherent weirdness of Merrill Lynch's HOLDRs, which don't track indexes like normal ETFs. HOLDRs are baskets of about 20 or so stocks selected by Merrill Lynch to represent a market, sector, subsector, or industry. The only time they change is when there is a merger, acquisition, or bankruptcy affecting one of the holdings. That methodological oddity has had a corrosive effect on an index full of business-to-business internet companies whose turn-of-the-century promise never turned up.

60187 and 60532
Zip codes from DuPage County, a suburban area west of Chicago that is home to three of the most aggressive young ETF families: PowerShares is headquartered in Wheaton, Ill., and First Trust Advisors and Claymore Advisors are located just a couple of miles away in Lisle, Ill.

DuPage also is home to at least one ETF analyst who hates golf almost as much as golf hates him. There must not be enough to do there.

Disclosure: Morningstar licenses its indexes to certain ETF providers, including Barclays Global Investors (BGI) and First Trust, for use in exchange-traded funds. These ETFs are not sponsored, issued, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in ETFs that are based on Morningstar indexes.