Would you invest in an ETF invented by a famous professor?
That’s the question asked by Ian Salisbury in the article Beware of Professors Bearing ETFs. Salisbury points out that the track record of exchange traded funds based on ivory tower theories have delivered mixed results.
One example is the WisdomTree LargeCap Dividend Fund (DLN), an ETF designed with help from Wharton professor Jeremy Siegel. DLN has underperformed the SPDR S&P 500 (SPY) and iShares Russell 3000 Index (IWV) over the past three years.
Salisbury also points to Yale economist Robert Schiller and the short-lived MacroShares funds that were supposed to provide exposure to housing prices but failed to gain traction.
The latest ETF with ties to a professor is the United States Commodity Index ETF (USCI) which is based on research by Yale professor Geert Rouwenhorst.