You Mean Whirling Ben Graham?

Thursday [Aug. 7] saw the launch of three ETNs tracking the Benjamin Graham Intelligent Value indexes through the Elements platform. The indexes, according to a press release from Deutsche Bank, are “based on the investment philosophy of Benjamin Graham, which seeks to identify businesses with strong, liquid balance sheets that trade at a discount to their implied intrinsic value”...

The three value-oriented funds include the following:

• Benjamin Graham Large Cap Value Elements (NYSE: BVL)
• Benjamin Graham Small Cap Value Elements (NYSE: BSC)
• Benjamin Graham Total Market Value Elements (NYSE: BVT)

Two things:

• BSC? Damn, the body’s not even cold. Small cap value yet? Who said Germans had no sense of humor? 
  
• While Graham is best known for ‘Security Analysis,’ the investment classic he co-authored with David Dodd, his ‘Intelligent Investor’ is also widely admired. The latest edition of that tome was edited by Jason Zweig, an entirely uninformed critic of ...small ETFs “so overspecialized that they make a pediatric endocrinologist seem like a family doctor who makes house calls.” And, of course, the latest entry in NakedShorts’ Moron du Jour Pantheon.

New ETNs Seek to Replicate Graham’s Strategies
by Heather Bell
IndexUniverse Aug. 7 2008

Earlier on NakedShorts:

The fright of the chameleon
Aug. 4 2008

Comments

[ETF Wanderer:]

The big question about these new indices is that what is so "Intelligent Value" about them; since as it is we already have value based ETFs, it is unlikely that these ETNs will gain much volume (unless the issuer is betting on investors to shift from ETFs to ETNs).

2008 Aug 11 10:18 AM

[searcher:]

Cynic, "ETN's, great, adding counter-party risk to the inherent vagaries of the market." Of course, we could hedge that risk with other derivatives. Yeah, right.

2008 Aug 11 11:09 AM