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Jonathan Liss

 
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  • ETF Investing Guide: A Core ETF Portfolio [View article]
    Yes, that's what I do in my personal portfolio. I own closer to 20 ETFs than the 10 we have here - the idea is to keep this a manageable size but I fully agree that that option is an excellent one both in terms of price and overall exposure.
    Dec 24, 2014. 04:56 AM | Likes Like |Link to Comment
  • ETF Investing Guide: A Core ETF Portfolio [View article]
    Hi Timothy,

    Some good original points you raise here. I'll try and answer one by one.

    For trading/longevity purposes, anything under $100M in AUM is generally problematic. The largest ETF ever shuttered had just over $100M in AUM so anything over the $200-300M level is totally safe in terms of longevity. With $480M and $540M in AUM, both of these funds are more than find in terms of having a 0% risk of closure. In terms of spreads, both of these funds are in the top third in terms of tightness of spreads. As this portfolio isn't meant to be regularly traded in and out of, this is more than sufficient for our purposes here.

    PLW is equally weighted between all Treasury maturities (1-30 years). This is the huge advantage of this fund over similar broad Treasury funds. It provides complete exposure to the entire yield curve without taking active bets on various maturity ranges. Its performance this year vs. closest competitor GOVT (it outperformed by 1,000 bps), which underweights long-term Treasuries, is a great example of why investors want to avoid active bets and instead cover as broad a range of investable markets across as many asset classes as possible.

    In terms of RWO, you make a very valid point - one that will be considered in future iterations of this portfolio as it does offer much more global exposure to the REIT sector.

    Finally, regarding DBC, the diversification benefit of adding in commodities is significant over time as they tend to have very different betas than both stocks and bonds. That said, this is really just a general recommendation. If you have a combination of funds that you feel can provide a better long-term diversification effect, then by all means go for it.

    All the best,
    Jonathan
    Dec 21, 2014. 05:42 AM | Likes Like |Link to Comment
  • ETF Investing Guide: A Core ETF Portfolio [View article]
    Timothy,

    BSV is an interesting suggestion. It holds both U.S. govt. and i-grade corporates with maturities of 1-5 years. Many of those same bond issues are also held by LQD and PLW and so adding it to this portfolio would be redundant. In terms of replacing those funds with BSV, it is true that BSV is a bit cheaper than LQD and PLW but if one is looking for exposure to the entire yield curve, they would need to also hold BSV's companion funds, BIV and BLV. This would also remove your ability to rebalance between corporates and Treasuries.

    Hope that helps,
    Jonathan
    Dec 18, 2014. 05:27 PM | Likes Like |Link to Comment
  • Creating The Perfect Bond ETF Portfolio [View article]
    Yep, spot on! And you can use these funds to capture both I-grade and Junk type yields as they come in both flavors.
    Nov 10, 2014. 05:53 AM | Likes Like |Link to Comment
  • Creating The Perfect Bond ETF Portfolio [View article]
    One excellent way to essentially avoid interest rate risk is via Maturity-date bond ETFs such as the BulletShares. Assuming an investor can hold to the fund's maturity, they can get the diversification of a fund while riding out any interest rate fluctuations to collect the full coupon value of each of the underlying holdings by holding to the fund's maturity date.
    Nov 10, 2014. 05:51 AM | Likes Like |Link to Comment
  • Eaton Vance up almost 10% as SEC approves new type of ETF [View news story]
    A couple of clarifications here as there's a bit of confusion around this new type of fund structure:

    1) They haven't received final approval yet - investors have until 12/1 to file a formal complaint with the SEC. All they've received so far is a 'letter of intent'

    2) The once-a-day trading mechanism still requires 2 things - SEC approval and exchanges to adopt it. These may take somewhat longer than the fund structure approval

    3) These funds shouldn't give ETFs a bad name because of several key differences:

    A) They will be called ETMFs
    B) They trade only once a day via a somewhat bizarre trading mechanism where traders enter 'NAV +$1' or 'NAV -$1' and the trade then settles after hours. Unlike ETFs, these funds DO NOT trade intraday
    C) Active managers are (rightly) concerned about front-running. These funds are non-transparent, unlike ETFs which are fully transparent, and thus investors are still betting on a manager - not an asset class or rules-based strategy as they are with ETFs.

    4) The similarities to ETFs make these funds better than mutual funds in my opinion:

    A) Since they are still exchange-traded, the issuer avoids 12b-1 fees and thus fees should be lower than those of traditional actively managed mutual funds. Since the main reason actively managed funds underperform their passive equivalents is higher fees, this should help close the performance gap (though the underlying trading fees should still keep overall performance worse than passively managed funds on the whole)

    B) hese will not be treated like pooled investments and so they should nearly always be more tax efficient than comparable mutual funds

    C) They will use the same creation/redemption mechanism ETFs use and so pricing should remain very close to NAV

    Hope that clarifies things somewhat.
    Nov 10, 2014. 05:44 AM | Likes Like |Link to Comment
  • Update: Schwab Offers 6 WisdomTree ETFs To Online Traders With $0 Commissions [View article]
    Were the terms of what Schwab is getting from WisdomTree disclosed? I don't believe they make such things public.

    Having raised this point with other issuers (not WisdomTree) who have their ETFs available commission-free on multiple discount brokerage platforms, my sense is that the issuers pay the discount brokers next to nothing - or nothing - to be included commission-free.

    What then is in it for the deep-discount brokers like Schwab then and why would they agree to waive the $10 commission (or whatever it is) every time buys or sells on of these funds?

    A couple of things from what I understand: 1) The ability to gather additional assets - or avoid bleeding assets to competitors that are offering large numbers of ETFs commission-free. Commission-free ETFs are a big draw these days - but most investors don't hold ETFs alone. They still buy and sell stocks, bonds, options, CEFs and more offering plenty of commissions to the discount brokers. Additionally, investors keep large amounts of cash in their brokerage accounts - which these days often serve the dual function of also being checking accounts, paying bills online, etc. And the discount brokers pay next to nothing on the cash parked in accounts so this is another source of income that comes from simply getting people in the door.

    2) Securities lending - this is a biggie. The more shares being custodianed on your platform, the more money a broker stands to make by lending them out to short sellers. Securities Lending is a standard line item on all publicly traded discount broker 10-ks (see here for TD Ameritrade as 1 example: http://buswk.co/1uZPuGZ)

    This explains why we're seeing larger and larger numbers of ETFs becoming available commission-free across multiple discount brokerage platforms. It's a win-win-win: The ETF issuers get to grow assets as a faster pace, the brokers have done the math and figured out that even giving up the $7-$10 commission to trade these shares, it's still well worth their while for the reasons I've outlined above, and most importantly (to us investors at least), the little guy saves a small fortune in trading and rebalancing fees.
    Sep 19, 2014. 09:12 AM | Likes Like |Link to Comment
  • Introducing Seeking Alpha's New ETF Hub [View article]
    Thanks for the suggestion. You can currently sort within the results tabs to view by AUM. Full screen for AUM probably in updated version of ETF Hub.
    Jul 11, 2014. 04:59 AM | Likes Like |Link to Comment
  • Introducing Seeking Alpha's New ETF Hub [View article]
    Thanks for the suggestions - CEFs are definitely on a list somewhere too - obviously they're a much smaller market place than ETFs but we hope to get to them at some point too.
    Jul 9, 2014. 07:16 AM | Likes Like |Link to Comment
  • Introducing Seeking Alpha's New ETF Hub [View article]
    Brad, Thanks so much for your comments - they are much appreciated.

    As a regular ETF investor, I totally agree. ETF.com in particular offers an incredible amount of free ETF data. From that pure 'quantitative' perspective their screener is clearly the best. We knew we could never one-up sites like ETF.com on that count.

    What we decided to focus on here is something I haven't seen elsewhere: A screener that combines quantitative data, qualitative 'deep dive' analysis and full portfolio integration including real-time alerts that allow you to never miss key news or analysis on one of your holdings.

    While I appreciate good quant analysis as much as the next guy, the issues with purely quantitative screeners have been pointed out already, here for example in daniel Kim's 'Do Stock Screens Really Work' (http://seekingalpha.co...).

    Data-only screeners are a great starting point. But the investing endgame involves a whole lot of qualitative analysis and ongoing due diligence. We feel our new ETF Hub brings investors much closer to being successful long-term ETF investors than any other site that at least i've seen to date.
    Jul 9, 2014. 07:14 AM | 1 Like Like |Link to Comment
  • Introducing Seeking Alpha's New ETF Hub [View article]
    Right now, there's a link at the bottom of the homepage, on the right rail under 'ETF Tools' on the ETF content section, and at the end of relevant content. We're thinking of adding it to some other places (i.e. ETF ticker pages) and hopefully in not too long, it'll be on the Nav on the HP.

    All the best,
    Jonathan
    Jul 8, 2014. 10:32 AM | 1 Like Like |Link to Comment
  • Introducing Seeking Alpha's New ETF Hub [View article]
    Yep, we're considering that. However due to limited header space on the HP/site-wide, it's not as simple as just adding one every time we roll out a new product we're excited about.
    Jul 8, 2014. 10:30 AM | 1 Like Like |Link to Comment
  • Introducing Seeking Alpha's New ETF Hub [View article]
    Palmdesert,

    I had linked to the ETF Hub a couple of times in the piece but here's that link again: http://bit.ly/1jb8qkS

    Best,
    Jonathan
    Jul 8, 2014. 08:30 AM | Likes Like |Link to Comment
  • A New Frontier For This ETF [View article]
    Looking at the long haul, I actually love this change to FM's underlying index. Though it's tough to argue with the fund's results since launching, I held out on buying it initially because of the intense single country (top 3 countries accounted for 58% of holdings) and sector (Financials were 57%) concentration risk. Under the new index, the top 3 countries are only 49% while financials are down to 48% of the total portfolio. These are both very welcome changes in my opinion as they mean the fund is more representative of Frontier Markets - and less correlated to Emerging Markets.

    Disclosure: Long FM (for roughly the last 8 months).
    May 22, 2014. 07:25 AM | 4 Likes Like |Link to Comment
  • It's Time To Buy This 3x Leveraged Gold Mining ETF [View article]
    This article should have mentioned the risks of compounding associated with leveraged ETPs held for more than 1 day. the more than 3x leverage clearly demonstrated in longer term returns here vs. gold is excellent proof of this.
    May 22, 2014. 02:50 AM | 1 Like Like |Link to Comment
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