Where New Investing Ideas Come From

One day in the near future, you may be able to trade an E.T.F. cooked up by a college freshman.

Clear Indexes announced the winner of its Next Generation E.T.F. College Contest yesterday. The contest was a challenge to students from Columbia, N.Y.U., and Lehigh University to come up with a unique and marketable E.T.F. The prize: $4,000, a paid internship, and the chance to work on publishing the winning index.

James Baker, an 18-year-old freshman at New York University, won the contest with his idea of a U.S. Exporters Index, which would be comprised of mid to large cap companies that generate revenue primarily from outside the United States.

The idea behind the fund is to capitalize on a globalized economy along with a falling dollar and "the cachet of 'Made in America,'" Andrew Corn, C.E.O. of Clear Indexes, writes in his company blog.

"I was extremely excited to learn I had the winning idea," said Baker, who said he worked straight through his Thanksgiving break to perfect the idea in time for the Monday deadline.

Though the contest was promoted at the three eligible schools, on the Internet and on Facebook, Baker heard about the contest through an article published in the Wall Street Journal. (Score one for newspapers in the print-online death match.)

Among the nearly 100 entries, two second-place winners were also announced, as well as 10 honorable mentions. Andrea Baburina, of N.Y.U., submitted a fund called the Global Country Rotation Index, and Pengcheng Lin, of Lehigh, thought up the China Value Index.

"We were ecstatic with the quality and variety of submissions," said Corn. "There were so many submissions consisting of high quality and unique strategies. The students obviously performed a lot of analysis to create their entries and worked hard to both prove and communicate their ideas. It was extremely difficult to choose just one grand prize."

Stay tuned for their second competition: Students from a yet to be determined 5 to 10 schools will be competing to come up with even more original E.T.F.'s.

by Jennifer Lai

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