Can't Tell an E.T.F. From an E.T.A.? Read On...

Ignorance may or may not be bliss, but it's certainly no obstacle to designing an exchange-traded fund.

That, at least, is the message in an unusual contest announced today by Clear Indexes, a Wall Street firm that would win a contest for understatement by describing itself as and "alternative to the typical investment fund company."

Not only is Clear Indexes soliciting amateur ideas for new securities, it is doing its soliciting on Facebook, the social networking web site.

The contest, is limited to students from New York University, Columbia, and Lehigh. (Fred Fraenkel, the chairman of Millennium Capital and member of the Clear Index board, is a Lehigh alumnus. He also heads the advisory board of Lehigh's College of Business and Economics.)

The conceit is this: Students from these universities have the chance to show they have the investment savvy of a Warren Buffett and compete to win $4,000 and a paid internship at Clear Index.

Not a business major? Not a problem.

Indeed, the contest web site helpfully answers such questions as "What is an E.T.F.?" and "What is an index?" It also notes that one can find information about E.T.F.'s on the internet, and recommends several pages on Yahoo Finance.

One of those pages is a list of 584 E.T.F.'s that someone else has already thought of—because, as the F.A.Q. notes: "Remember, your idea must be unique!"

"It is just the type of contest that will energize a core group of students to test the marketplace in a risk-free environment," Richard Kish, chairman of Lehigh's Perella Department of Finance, said in a statement.

by Mark Stein