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Q & A

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Is there an ETF for the Value Line Geometric?

By Arthur B. Hill - Thu 17-Aug-06 9:04 AM EDT

Question: Will there one day be an ETF that follows the Value Line Geometric?

Answer: I do not know of an ETF that tracks the Value Line Geometric Index ($VLIC). However, there are some closed-end-funds (CEFs) that utilize the Value Line ranking system to select stocks. The First Trust Value Line Dividend Fund (FVD) fund selects Value Line stocks ranked either 1 or 2 for Timeliness, Safety or Technical. The First Trust Value Line 100 Fund (FVL) invest in a diversified portfolio of the 100 common stocks ranked number 1 for Timeliness in Value Line’s ranking system. The First Trust/Value Line Fund (FVI) selects Value Line stocks ranked either 1 or 2 for Timeliness, Safety or Technical.

These are all closed-end-funds and they trade at a discount to their net asset value. However, there is a move afoot to convert some of these closed-end-funds to ETFs. The Wall Street Journal reports that First Trust Advisors has approved a move to convert two Value Line based closed-end-funds to ETFs and the shareholder vote is expected by the end of the year. This could unlock some value and close the gap between the fund price and the net asset value.

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