TBTF ETF Backtest (Red)

Source: Bespoke

 

I am putting together a new ETF that consists entirely of companies that have become so large and systemically important that they are guaranteed survival regardless of their own incompetency.

It is a market cap weighted index (naturally) so that those names that represent the greatest threat to the overall economy have the highest weighting. Full universe of potential holdings are here.

Ticker symbol: TBTF

Top 10 Holdings
AIG*
Citigroup
Bank of America
Morgan Stanley
Goldman Sachs
Wells Fargo
Fannie Mae
JPMorgan
US Bancorp
Ally

Note: Because shareholders got wiped out in the GM and Chrysler bankruptcy, they do not qualify.

We expect trading to begin May 1. Full disclosures and documentation available on request.**

We also be rolling out the leveraged version — 200% long, symbol XTBTF, and of course, the Ultra — a triple leveraged ETF, symbol UTBTF.

We will be following the domestic ETF with an international version: TBTFi (not to be confused with the BlackRock’s offering, iTBTF). It will be filled with ECB notes, Japanese banks, Sovereign debt from Greece and Cyprus, etc. For diversification purposes, it is important to own TBTF banks in various geographic regions in case of local central bank collapse or nuclear accident.

 

 

 

 

 

____________________

* AIG is really in there as a sentimental favorite, but they are no longer truly TBTF.

** No, not really, as this is sarcasm.

Category: ETFs, Humor

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

18 Responses to “Coming Soon: TBTF ETF”

  1. Orange14 says:

    LOL! Maybe you shouldn’t have bailed on Bruce Berkowitz’s Fairholme a couple of years ago, it’s almost the paradigm of a TBTF fund (though it does have a higher fee than an ETF would). I hung tough with him and was certainly rewarded last year. I’m not sure that WFC should be in this category given that Saint Warren of Value seems to be buying an increasingly larger stake.

    ____

    BR: Very happy switching into SDY — lower fee, less volatility, no style drift.

  2. Michael M says:

    Speaking of comedy, check out the 5-day performance of FNMA:

    http://www.google.com/finance?q=fnma&ei=OPtKUdiJD8aGwAP3Qw

    ____

    BR: thats why its in the ETF!

  3. call me ahab says:

    awesome- can I get a 3X on that!

    you crack me up dude

  4. wally says:

    Just like the Onion, you can no longer always tell sarcasm and satire from reality.
    If you did this, people would buy.

  5. Mike in Nola says:

    What gives? it’s not April 1 yet.

  6. The Window Washer says:

    GE?

  7. DHM says:

    I realize that this is humor piece, and funny it is. That said, I wish US Bancorp wasn’t lumped in with the other clowns.

    USB was probably one the few banks (and probably the only large regional bank) that purposely didn’t get caught up in the mortgage shenanigans during the 2000s. They rightly saw it as a bubble. And they held to this line, despite being repeatedly criticized by shareholders and analysts. USB should be held out as a model for how other large banks should have acted during this period.

  8. AndrewShaw says:

    DHM,

    You may be right, but your comment is funny in the vein of “Congress approval ratings low, my congresscritter is doing a good job”-type sentiment out there.

    or the Lake Wobegon, all our ___ are above average..USB is bog in Minnesota right?

    Sorry could not resist.

  9. krice2001 says:

    Oh, you were being sarchastic… I was ready to… nevermind .

  10. AHodge says:

    what a great idea
    G Dam it! the Fannie i sold 10 days ago is up from 27cents to $1.42.
    i was afraid the new joint venture migh allow them to wipe out the old equity.

  11. AHodge says:

    i was operting on your principal. i wanted my bailout and guarantee. almost got it. i dont think i can repurchase now though.

  12. GeorgeBurnsWasRight says:

    Darn these pesky trifocals.

    I read it would be a crap-weighted index.

  13. ashpelham2 says:

    Dang, I got my hopes up too soon! Talk about a better bet than US Treasuries! But I can also see another ETF: for smaller banks that are about to be gobbled up by the TBTF banks: BXS, Synovus, 5/3…

  14. [...] TBTF  Hilarious: An idea for a TBTF ETF – Barry Ritholtz [...]

  15. rd says:

    Your thinking is too constrained and inside the box. The ETF should also include critical companies that are TBTF outside the financial sector. One that immediately comes to mind is Lockheed Martin and its F-35 fighter jet.

  16. boveri says:

    The more I think about it – a TBTF ETF could be the smartest bet of all for a conservative investment. I’d only modify my stance if The Bernank should suddenly expire.