PASSIVE QQQ INDEX FUND PERFORMANCE TOPS NASDAQ 100 INDEX FUND OVER DECADE-LONG PERIOD, STUDY FINDS

Posted May 2, 2008

CHICAGO – The PowerShares QQQ exchange-traded fund (ETF) can outperform the Nasdaq 100 Index ETF, according to a study of data from March 1999 to March 2008, performed by Edward Szado and Hossein Kazemi of the University of Massachusetts on behalf of the Options Industry Council (OIC), an industry cooperative funded by several North American options exchanges.

A passive collar strategy using a six-month put purchase and consecutive one month call writes provided greater returns compared with buying and holding the Nasdaq 100 Index ETF with about one-third of the index volatility, according to study conducted by Szado and Kazemi of the Isenberg School of Management’s Center for International Securities and Derivatives Markets (CISDM) at the University of Massachusetts.

Over the study period from 1999 to this year, the collar strategy returned more than 150 percent, cumulatively, while the cube portfolio lost over 12 percent.

The OIC is backed by the American Stock Exchange, Boston Options Exchange, Chicago Board Options Exchange, International Securities Exchange, NYSE Arca, Philadelphia Stock Exchange and The Options Clearing Corporation.