The Art and Science of Tickers

With the recent news that the Select SPDR Trust is suing Invesco Powershares due to trademark infringement relating to tickers, a unique area of product development and marketing was highlighted in the ETF world: tickers.(Quick primer: Invesco Powershares launched small cap S&P sector ETFs and created tickers for them that simply added an “S” to the existing large cap Select SPDR ETF tickers, thereby leveraging the current sector ETF “ownership” of the Select SPDR ETF family. For more detail check out Invesco Powershares sued by Sector SPDRs)

The exchange traded nature of ETFs often make their ticker symbols the primary point of reference for the fund. One easy analogy is to think of the ticker symbol of an ETF being like the jersey number of your favorite athlete. Michael Jordan is known for 23 in basketball and Brett Favre owns the number 4 in football. These numbers or “tickers” are shortcuts that represent the product and are often used in lieu of their full names. Accordingly, many ETF providers work hard at ticker creation. Ideally a ticker symbol should be relatable to the asset class being tracked and easy to remember. Being relatable and memorable create the foundation for an ETF ticker to “own” the space. In the ETF world this means the ETF is the most often referenced product to access a particular asset class or investment strategy. That “ownership” factor increases the volume and ultimately the AUM of the fund. Quite simply, tickers have an impact on the success of the ETF and there is an art and science used to create these ETF nicknames. Continue Reading

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