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Journal of Indexes

Merrill Lynch Does Technology

Related ETFs: PSI
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It's not only the world's index providers and exchanges (see p. 56) that are active in launching new indexes. Merrill Lynch recently launched two new technology indexes of its own.

In January, the company launched its Global SuperTech 20 index. The index contains 20 technology stocks from North America, Europe and Asia. The components were selected from a wide range of technology categories, from semiconductors and the Internet to biotechnology and communication technology. Merrill Lynch also issued 500 million euros in certificates on the index in February. The four-year certificates are traded on the Luxembourg, Frankfurt, Stuttgart, Munich, Paris, Madrid, and Milan exchanges.

Also in January, the company launched another technology index, this time for a specific region: LatinAmerica. The index contains 22 stocks with a total market capitalization of about $125.5 billion. Not all the companies are Latin American; many are from the US but do a significant amount of business in the region, for example Prodigy, StarMedia, and PSI Net. The companies included all have interests in the Internet, telecommunications, e-commerce, or media.The new index will allow investors to track performance of their portfolios amid increasing interest in the region's technology sector, Merrill Lynch said in a recent report.

The index also fills a void resulting from the tendency of recent Latin American initial public offerings to be listed on the Nasdaq. A Nasdaq listing makes them likely to be excluded in benchmark indexes - including Morgan Stanley Capital International and International Finance Corp. - or in the local indexes, which tend to be country specific, the report said.

 

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