This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

An ETF Mr. Burns Would Love

NEW YORK (TheStreet) -- Mr. Burns, the plutocrat from The Simpsons, didn't get rich by investing in newfangled companies.  He is more of a traditionalist. On the show, his portfolio included Transatlantic Zeppelin and Amalgamated Spats. These old-fashioned companies seem silly, but Mr. Burns may have had an innovative idea there: invest in longstanding companies. 

Now there's an ETF for that.

The new PowerShares NYSE Century Portfolio (NYCC) owns companies that are household names and have been in business for at least 100 years.

That doesn't mean that the companies have been publicly traded for 100 years, though. For example, UPS (UPS) has been in business since 1907, but its stock has only been trading since 1999.

The implication of course is that the companies' ability to weather the last century likely means they will do well in the current one.

The PowerShares Century ETF is not a simple market cap-weighted index fund. PowerShares was an early mover in "smart beta" funds, which screen a broad-based index for stocks that meet a valuation metric or some other attribute like volatility or a dividend strategy. NYCC is one such smart beta fund.

The Century ETF also employs an equal weighting strategy. In other words, instead of holding its stocks based on their market cap (basically their size), it buys equal amounts of each of its stocks, regardless of valuation. PowerShares says that "helps the portfolio potentially avoid overweighting overvalued companies and underweighting underpriced companies." The company also notes that equal weighting allows the smaller companies to contribute more to the fund's performance.

More than half of NYCC is in small and mid-cap stocks, which is surprising. Most investors would probably assume a fund like this would be dominated by mega caps like Johnson & Johnson (JNJ) and Procter & Gamble (PG). While those names are in the fund, the equal weighting also allows room for companies that investors might not realize have been trading for so long.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs