Tuesday, July 11, 2006
Some of you might recall that Spock's father was Phonak. Humor attempt.
The other six people, besides me, watching the Tour de France will recognize Phonak as one of the teams in the tour. A secondary sponsor of the team is iShares. Next year iShares will be the primary sponsor of the team.
From a contrarian, of sorts, point of view could this be a top for ETFs one way or another? Probably not but there are a couple of rather gimmicky funds on the way.
The Claymore Stealth ETF that is still in registration seems like it might be a bit of a stretch. The idea is that it will own stocks that are under-covered by brokerage firms.
The idea is that the street misses smaller companies that are growing quickly. Brokerage firms don't get around to sponsoring these smaller companies until they grow bigger. The Stealth ETF will presumably own these stocks while they are getting big enough to get picked up by analysts.
The idea really is a bet that the industry is wrong and slow. I'm sure they have great data to support the idea but it might be a tough bet to make. This will no doubt be a proxy for small or micro cap stocks. With something like this it probably makes sense for the fund to build some track record before buying. It may be a proxy for small cap, but it may not be a good proxy.
Posted by Roger Nusbaum at 6:13 AM