Year of the Designer ETF?

In the ever expanding world of exchange-traded funds, this is shaping up to be the year of the quant ETF, according to IndexUniverse.com. Three companies are currently waiting for the SEC to green-light active ETFs, and many of the 451 ETFs and similarly structured ETNs (exchange-traded notes) in line for approval “involve some form of quantitative or alternative methodology to index construction,” writes Murray Coleman of the site. These so-called designer ETFs or intelligent ETFs attempt to beat indexes, instead of just representing them. An example is the Claymore/Zacks International Yield Hog, an exotic mix of REITs, master limited partnerships, and Canadian royalty trusts designed to generate high income.

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