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Jonathan Liss  

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  • BlackRock launches physical U.S. real estate ETF [View news story]
    Sure, understood. But it really is just a coincidence
    May 13, 2015. 01:34 PM | Likes Like |Link to Comment
  • Announcing Our New Income Investing Center [View article]
    For now all articles that appear in the Dividend Investing Center also appear on the Dividends & Income dashboard. Whether that will be the case at some future point is anyone's guess ;-)
    May 13, 2015. 01:33 PM | Likes Like |Link to Comment
  • Announcing Our New Income Investing Center [View article]
    The name of the overarching Dashboard theme is 'Dividends & Income'. Within each dashboard we also have themes of which 'Dividend Investing Insight' is one.
    May 13, 2015. 07:53 AM | Likes Like |Link to Comment
  • Does Reading Seeking Alpha Really Help Beat The Market? A 5-Year Meta-Analysis [View article]
    As, the S&P 500 is limited to small and mid cap stocks, a better measure of outperformance would have evaluated returns vs. a true multicap index like the Russell 3000 or even Wilshire 5k.

    Also, the cost of beating the market is significantly higher when you account for trading costs and after-tax returns. That isn't taken into account here. In the real world, it has to be accounted for.

    That said, I think this analysis is nonetheless quite good for several reasons:

    1) it is presented in an honest, 'detached' way without any hype or hyperbole. The #s are allowed to speak for themselves.

    2) it refuses to rule out the possibility that luck accounted for most of this 'alpha'

    3) it breaks out Editor's Picks separately

    A note from a past editor (I now work on designing new products/parts of the site for SA): We made a concerted push starting in mid-2012 to significantly improve the rigor with which we reviewed articles, streamlined the article disputes process, and eliminated 'machine-written' analysis that was overly formulaic/lacked rigorous human qualitative analysis (which is necessary for even high quality quant-based fundamental analysis). I believe the results of this focus on quality among our contributors is borne out by the author's recognition of the fact that SA contributors have 'gotten better over the last 2 years'.

    May this continue to be the case!
    Mar 11, 2015. 03:58 AM | 4 Likes Like |Link to Comment
  • BlackRock launches physical U.S. real estate ETF [View news story]
    There is no connection between these 2 securities other than the coincidence that they share the same ticker symbol on 2 separate exchanges.
    Feb 9, 2015. 09:22 AM | Likes Like |Link to Comment
  • BlackRock launches physical U.S. real estate ETF [View news story]
    BlackRock has no interest in the USPR that trades OTC in the U.S. It's simply a coincidence. The ticker for BlackRock's new London listed Real Estate ETF is also USPR. But these are 2 totally different entitities that trade on different exchanges. Hope that helps clarify things.
    Jan 29, 2015. 08:14 AM | Likes Like |Link to Comment
  • BlackRock launches physical U.S. real estate ETF [View news story]
    This doesn't trade in the US - it's only listed in the UK. Just as an FYI - not a product for US investors.
    Jan 18, 2015. 02:18 PM | Likes Like |Link to Comment
  • 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
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