Taking a cue from the market,
has filed to launch two new HOLDRs that focus on the relatively tame banking and utility sectors.
Merrill's nine existing HOLDRs track high-growth areas like
(business-to-business Internet stocks)
But the Nasdaq selloff has hit many of them particularly hard, as a
recent story pointed out. The B2B holders, for example, are off 61.6% since March 10, compared with a 24.4% decline in the
Nasdaq Composite Index
. Merrill is obviously expanding its HOLDRs roster to include products for less daring investors.
Both regional banks and utilities have fared quite nicely during the recent market turmoil. The
John Hancock Regional Bank fund -- a good proxy for the industry -- has climbed 13.2% since March 10, compared with a 2.7% gain in the broader
index. Utilities stocks, regarded as a defensive play for their steady, reliable earnings, have done even better. The
Dow Jones Utilities
index has jumped 14.6% over the same period.
Despite their more conservative bent, Merrill's forthcoming
HOLDRs will look similar to existing HOLDRs securities.
Each HOLDR will own 20 of the largest, most liquid stocks in their respective sectors and trade on the
American Stock Exchange
as a single security. These securities can only be bought and sold in increments of 100 shares, also known as round lots. (The Amex now has an
area on its Web site dedicated to the products.)
It's unclear when these HOLDRs will launch, but they usually start trading about three weeks after the initial filing.
Evidently, some investors try to load up on HOLDRs holdings in advance, knowing that Merrill will eventually have to buy them in large quantities for its portfolios. So here's a look at the stocks Merill eventually will be buying: