iShares S&P U.S. Preferred Stock Index ETF (PFF)announces monthly distribution of $0.100. 30-day SEC yield of 5.54%. For shareholders of record Mar. 05. Payable Mar. 07. Ex-div date Mar. 01. [View news story]
So, to clarify: was the 5.54% 30-day SEC yield reported (in the Market Current) for the last dividend actually paid, and not the yield once the new distribution is made on March 7th?
iShares S&P U.S. Preferred Stock Index ETF (PFF)announces monthly distribution of $0.100. 30-day SEC yield of 5.54%. For shareholders of record Mar. 05. Payable Mar. 07. Ex-div date Mar. 01. [View news story]
Sorry for the ignorant question, but how exactly is the 30-day SEC yield calculated?
Guggenheim announces it will shutter 9 ETFs "in order to focus resources on products that have demonstrated greater marketplace demand." Final day of trading to be March 15 with liquidation expected to be "on or around" March 22. The affected funds (with direct competitors in parentheses) are: ABCS (SDIV, VYM), EWEF, EWMD, EWSM, FAA, RSU (SSO), RSW (SDS),WFVK and WXSP. (PR) [View news story]
It's a pity that EWSM is closing - note how it outperforms the equivalent market cap weighted index ETF: http://seekingalpha.co...
"A retailer (Amazon), an entertainment company (Netflix), an advertiser (Google), a résumé site (LinkedIn), and an address book (Facebook) have ended up shaping the future of [tech] infrastructure," writes a bemused Ashlee Vance. Unsatisfied with the solutions offered by the likes of IBM, HPQ, EMC, NTAP, and ORCL, Web giants have used home-grown hardware and open-source software projects to fulfill their needs. Their ideas and technology are already upending the server industry ... and their impact stands to grow as more companies buy in. [View news story]
Perhaps a better description than "A retailer, an entertainment company, an advertiser, a résumé site, and an address book" would be:
"5 large consumers of technology hardware and software, who, because they understand tech, aren't happy with the cost/benefit of the leading tech suppliers' products."
Guggenheim increases expense ratios on 4 ETFs on account of "higher acquired fund fees associated with the S&P benchmarks these ETFs track". The affected funds (with new expense ratio in parentheses) are: RFV (0.40%), RZV (0.38), EWMD and EWSM (0.43%). Two Russell and MSCI ETFs seeing a decline in fees are: EWRS (0.43%) and EWEM (0.70%). [View news story]
Does anyone have any thoughts on why EWMD and EWSM haven't seen the same level of asset growth as RSP?
In the two decades through December, the average return of all investors in U.S. stock mutual funds was an annualized 4.25% vs 8.2% for the S&P 500. That translates into a difference of $25,467 for an investment of $10,000. "The dismal truth is that over the long run, the average person is a woeful investor," writes the NYT's Jeff Sommer. [View news story]
AI, your comment contradicts most academic research on this topic. Eg.
"On average, investors who pick stocks underperform the market by about 2 percentage points a year, according to professors Barber and Odean at the University of California at Berkley." (Source: http://seekingalpha.co...)
The NYT article in the Market Current also says that a significant contribution to mutual fund investor underperformance comes from individual investors trading in and out of funds at the wrong time.
In the two decades through December, the average return of all investors in U.S. stock mutual funds was an annualized 4.25% vs 8.2% for the S&P 500. That translates into a difference of $25,467 for an investment of $10,000. "The dismal truth is that over the long run, the average person is a woeful investor," writes the NYT's Jeff Sommer. [View news story]
johnbee, the question for most investors is simply whether they would be better off buying and holding an S&P500 index fund, such as (SPY) or (IVV) or even better (RSP). If you'd have done that, you'd have got the performance described in the article without having to do the things you described, such as cherry pick stocks, trade, get into tech stocks early or invest in small caps or venture capital.
New Low Observer, you're right that S&P's track record in choosing which stocks to add to the S&P500 index hasn't been stellar, particularly in the late 1990s. And yet, and yet... simply buying and holding SPY or a Vanguard S&P500 index mutual fund would have resulted in far better performance for most people than what they actually did.
In the two decades through December, the average return of all investors in U.S. stock mutual funds was an annualized 4.25% vs 8.2% for the S&P 500. That translates into a difference of $25,467 for an investment of $10,000. "The dismal truth is that over the long run, the average person is a woeful investor," writes the NYT's Jeff Sommer. [View news story]
jhenn19630,
There are three causes of investor underperformance:
1. Mutual fund managers don't beat their benchmarks on average. (When I researched this at http://bit.ly/10z6cls , the data showed that on average mutual fund managers underperformed the index by 2-3 percentage points a year.)
2. Expenses for actively mutual funds are meaningfully higher than for index funds and ETFs.
3. Most individual investors trade in and out of funds, and end up buying high and selling low.
Arguably, numbers (2) and (3) are the responsibility of individual investors.
The Dumbest Portfolio For The Smartest People [View article]
There's massive competition among core US equity ETFs, so the expense ratios of the US total market and S&P 500 ETFs are lower than almost anything else. Foreign stock ETFs may also a bit more expensive to administer, due to trading and currency logistics.
The surprise is that the Total World Stock Market ETF should be more expensive than the FTSE All-World ex-US ETF.
The Dumbest Portfolio For The Smartest People [View article]
A quick thought on expense ratios. You could split your equity position (using whatever weighting you choose) into: 1. Vanguard Total Stock Market ETF (VTI), expense ratio 0.06% 2. Vanguard FTSE All-World ex-US ETF (VEU), expense ratio 0.18%
Doing that would lower your average expense ratio below the 0.22% for the Vanguard Total World Stock Market Index ETF (VT).
Thomas, if this is for the long term, how do you assess the potential upside of more targeted EM ETFs vs. the long term negative impact of the higher expense ratios? The higher expense ratio is known for sure, whereas the alpha from the EM ETF is less certain.
I remember that a Morningstar study showed that long term mutual fund performance was highly correlated (inversely) with fund fees.
You're right that the exercise is backward looking. Using current dividend champions as an initial filter means that the stocks you end up with suffer from strong survivorship bias (eg. it eliminates many financials which paid great dividends until the crisis).
If you had to construct a portfolio now for the next ten years, what would it look like?
Thanks Thomas. When you write " I believe that by utilizing differentiated index strategies investors can improve their returns", are you thinking about that in terms of long term buy-and-hold, or a more trading-oriented strategy?
iShares S&P U.S. Preferred Stock Index ETF (PFF) announces monthly distribution of $0.100. 30-day SEC yield of 5.54%. For shareholders of record Mar. 05. Payable Mar. 07. Ex-div date Mar. 01. [View news story]
iShares S&P U.S. Preferred Stock Index ETF (PFF) announces monthly distribution of $0.100. 30-day SEC yield of 5.54%. For shareholders of record Mar. 05. Payable Mar. 07. Ex-div date Mar. 01. [View news story]
Guggenheim announces it will shutter 9 ETFs "in order to focus resources on products that have demonstrated greater marketplace demand." Final day of trading to be March 15 with liquidation expected to be "on or around" March 22. The affected funds (with direct competitors in parentheses) are: ABCS (SDIV, VYM), EWEF, EWMD, EWSM, FAA, RSU (SSO), RSW (SDS), WFVK and WXSP. (PR) [View news story]
"A retailer (Amazon), an entertainment company (Netflix), an advertiser (Google), a résumé site (LinkedIn), and an address book (Facebook) have ended up shaping the future of [tech] infrastructure," writes a bemused Ashlee Vance. Unsatisfied with the solutions offered by the likes of IBM, HPQ, EMC, NTAP, and ORCL, Web giants have used home-grown hardware and open-source software projects to fulfill their needs. Their ideas and technology are already upending the server industry ... and their impact stands to grow as more companies buy in. [View news story]
"5 large consumers of technology hardware and software, who, because they understand tech, aren't happy with the cost/benefit of the leading tech suppliers' products."
That is indeed worrying for those suppliers.
Guggenheim increases expense ratios on 4 ETFs on account of "higher acquired fund fees associated with the S&P benchmarks these ETFs track". The affected funds (with new expense ratio in parentheses) are: RFV (0.40%), RZV (0.38), EWMD and EWSM (0.43%). Two Russell and MSCI ETFs seeing a decline in fees are: EWRS (0.43%) and EWEM (0.70%). [View news story]
In the two decades through December, the average return of all investors in U.S. stock mutual funds was an annualized 4.25% vs 8.2% for the S&P 500. That translates into a difference of $25,467 for an investment of $10,000. "The dismal truth is that over the long run, the average person is a woeful investor," writes the NYT's Jeff Sommer. [View news story]
"On average, investors who pick stocks underperform the market by about 2 percentage points a year, according to professors Barber and Odean at the University of California at Berkley." (Source: http://seekingalpha.co...)
The NYT article in the Market Current also says that a significant contribution to mutual fund investor underperformance comes from individual investors trading in and out of funds at the wrong time.
In the two decades through December, the average return of all investors in U.S. stock mutual funds was an annualized 4.25% vs 8.2% for the S&P 500. That translates into a difference of $25,467 for an investment of $10,000. "The dismal truth is that over the long run, the average person is a woeful investor," writes the NYT's Jeff Sommer. [View news story]
New Low Observer, you're right that S&P's track record in choosing which stocks to add to the S&P500 index hasn't been stellar, particularly in the late 1990s. And yet, and yet... simply buying and holding SPY or a Vanguard S&P500 index mutual fund would have resulted in far better performance for most people than what they actually did.
In the two decades through December, the average return of all investors in U.S. stock mutual funds was an annualized 4.25% vs 8.2% for the S&P 500. That translates into a difference of $25,467 for an investment of $10,000. "The dismal truth is that over the long run, the average person is a woeful investor," writes the NYT's Jeff Sommer. [View news story]
There are three causes of investor underperformance:
1. Mutual fund managers don't beat their benchmarks on average. (When I researched this at http://bit.ly/10z6cls , the data showed that on average mutual fund managers underperformed the index by 2-3 percentage points a year.)
2. Expenses for actively mutual funds are meaningfully higher than for index funds and ETFs.
3. Most individual investors trade in and out of funds, and end up buying high and selling low.
Arguably, numbers (2) and (3) are the responsibility of individual investors.
The Dumbest Portfolio For The Smartest People [View article]
The surprise is that the Total World Stock Market ETF should be more expensive than the FTSE All-World ex-US ETF.
Can anyone suggest why that should be the case?
The Dumbest Portfolio For The Smartest People [View article]
1. Vanguard Total Stock Market ETF (VTI), expense ratio 0.06%
2. Vanguard FTSE All-World ex-US ETF (VEU), expense ratio 0.18%
Doing that would lower your average expense ratio below the 0.22% for the Vanguard Total World Stock Market Index ETF (VT).
Dividend Aristocrat Investing 2013 [View article]
Thanks for the excellent article.
You wrote: "Others might claim that the equal-weighted nature and lack of rebalancing at least in part drives relative performance."
1. What did you mean by "lack of rebalancing"? If the index is equal weighted, doesn't that mean there is periodic rebalancing?
2. Can you quantify how much the equal weighting adds to the performance of the Dividend Aristocrats index?
3. How does the performance of the Dividend Aristocrats index compare to that of the equal weight S&P 500 (RSP)?
Safe 35 For 1991-2012 [View instapost]
GEM Sector ETFs: Unique Options [View article]
I remember that a Morningstar study showed that long term mutual fund performance was highly correlated (inversely) with fund fees.
Safe 35 For 1991-2012 [View instapost]
You're right that the exercise is backward looking. Using current dividend champions as an initial filter means that the stocks you end up with suffer from strong survivorship bias (eg. it eliminates many financials which paid great dividends until the crisis).
If you had to construct a portfolio now for the next ten years, what would it look like?
Best,
David
GEM Sector ETFs: Unique Options [View article]