Case | HBS Case Collection | March 2001 (Revised November 2001)

Merrill Lynch HOLDRS

by Andre F. Perold and Simon E. Brown

Abstract

Exchange-traded funds (ETFs) and HOLDRS (Holding Company Depositary Receipts) represent recent and highly successful capital market innovations. HOLDRS closely approximates a buy-and-hold strategy, and Merrill Lynch believes the product has significantly lower taxes and other costs than ETFs. The firm is considering broadening the market for HOLDRS by introducing a new 50-stock basket, "Market 2000+ HOLDRS," that would hold 50 of the world's top-capitalized stocks.

Keywords: Capital Markets; Cost; Stocks; Financial Strategy; Investment Funds; Taxation; Innovation and Invention; Product; Success; Expansion;

Citation:

Perold, Andre F., and Simon E. Brown. "Merrill Lynch HOLDRS." Harvard Business School Case 201-059, March 2001. (Revised November 2001.)