ETF's Gone Wild: A Wal-Mart ETF.. Really (WSI, WMT)

There is a ton of value that ETF’s bring to the table.  They trade like stocks, they have lower fees, they are usually more transparent, and more when you compare these to traditional mutual funds.  But sometimes ETF’s go to far and become too specific.  Enter today’s new ETF launch: FocusShares ISE-REVERE Wal-Mart Supplier Index Fund (NYSE Arca: WSI).

This ETF is meant to track the performance of the ISE-Revere Wal-Mart Supplier Index which is made up of stocks of companies that derive a substantial portion of revenue from Wal-Mart Stores, Inc. (NYSE:WMT).  On this premiere trading day, we saw a whopping 2,000 shares trade.

If they are going to create ETF’s that are this focused, 24/7 Wall St. would like to suggest to Revere and FocusShares some new ETF ideas:

• A porn ETF, after all it’s one of the biggest online segments out there;
• An Apple-supplier ETF, after all its suppliers do actually move on new inclusions or exclusions;
• An "SEC Stock Options Investigation" ETF for all the companies that will benefit after they get the SEC out of their offices;
• A prison-related ETF that tracks prison REITs, security systems, and law enforcement stocks;
• An illegal alien ETF that tracks the largest "hiring alien" companies, the companies that win off border patrol and "the fence" and we could even include the restaurants, clothing and retail chains most frequented by illegal aliens.

You get the idea.  We love most ETF’s.  Just not the notion of this one.

Jon C. Ogg
November 30, 2007