Teen's dollar-linked ETF takes prize in contest

Thirtysomething new-product developers, look out. An 18-year-old college student has created an exchange traded mutual fund. James Baker, a freshman at New York University, won the Next Generation ETF College Contest, which was conducted via the Internet by Clear Indexes LLC of New York. He beat nearly 100 other entries from students at NYU, Columbia University in New York and Lehigh University in Bethlehem, Pa. The three schools were the only participants in the contest. Mr. Baker's entry was a U.S. exporters' index that benefits from the falling value of the dollar. He looked to major companies that handle business globally as opposed to focusing just on the United States.
"I wondered how you can turn the sinking dollar into a positive," Mr. Baker said. "What came to mind for me were the big international companies such as McDonalds [Corp. of Oak Brook, Ill.]," he said. "They do more sales internationally than in the U.S." The concept caught the eye of Clear Indexes' chief executive, Andrew Corn. "This is almost a Darwinistic thing," he said. "The bigger companies are becoming stronger and doing more business overseas." Mr. Baker and his model will soon be put to the test. He won a $4,000 prize, a paid internship at Clear Indexes' Wall Street office and a chance to work on publishing his index. "Everything starts with a great idea, but there are hundreds of tests performed on the indexes before they're considered good enough to show to an issuer," said Mr. Corn. Dow Jones & Co. Inc. and Standard & Poor's, both of New York, are among the companies that may get a peek at the new index, he added. "This contest was a really good idea to get a fresh perspective into the ETF business," Mr. Baker said. "It's been very cool." Clear Indexes is searching for more schools to include in its next ETF contest, which will run between Feb. 25 and April 4.