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Ron Rowland  

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  • ETF Deathwatch For May 2015: Back Above 300 [View article]
    I do not believe it is necessarily "easier" for an ETN to dissolve without proper resolution to shareholders. The only way I know for them to do this is to 1) declare bankruptcy, or 2) default on the payment at maturity (typically 20-30 years after being issued).
    May 27, 2015. 09:00 AM | Likes Like |Link to Comment
  • How To Beat The Market With Sector Rotation [View article]
    that is easy to explain. In the 10-year time period shown, the smaller weighted sectors within the S&P (energy, materials, etc) outperformed the larger weighted sectors (health, financials, tech).
    May 12, 2015. 03:19 PM | 1 Like Like |Link to Comment
  • MLPA: Another C-Corp. Double Taxation ETF [View article]
    Shareholders do get current yield of 6.5% or whatever it is today. However, that has historically been more than the tax bite. They take the tax expenses out of the NAV instead of out of the income stream.
    Apr 9, 2015. 01:32 PM | Likes Like |Link to Comment
  • Rule Of 240 [View article]
    Not really. The annual return can be generated in any manner. It works for buy & hold as well as day-trading and all points in between.

    The fuzziness you refer comes into play in the annual return, not the mathematics behind the Rule of 240. (Note: see other discussions regarding adjusting for inflation. Similar adjustments can be made for tax considerations).
    Apr 6, 2015. 08:38 AM | Likes Like |Link to Comment
  • Rule Of 240 [View article]
    To all, re: inflation adjustments

    The article referred to an "investment" gaining 10x, but in reality it could be anything in nature that compounds - including inflation.

    Inflation at 3% a year would be 10x after 80 years (240/3). Or if you prefer to think of it in terms of diminishing value, your $1 will be worth 10 cents in 80 years at 3% inflation.

    To Rule of 240 still applies, you will just need to adjust for inflation to get to the "real" return. For example, a 12% nominal return takes 20 years to increase 10x. With 3% inflation, your 12% nominal becomes a 9% real return and the years to 10x becomes 240/9= 26.7 years.

    You can also use it to provide a reality check to clients that believe their $100k is going to turn into a $1 million retirement fund at 5% a year. With no inflation, that lofty goal requires about 48 years. With 3% inflation and a 2% real return, it quickly extends to multiple lifetimes (240/2 = ?? the answer is left as an exercise for the student).
    Apr 2, 2015. 08:35 AM | 9 Likes Like |Link to Comment
  • ETF Deathwatch For March 2015: Membership Falls Below 300 [View article]
    Exchange Traded Products encompasses both ETFs and ETNs
    Mar 12, 2015. 10:39 AM | Likes Like |Link to Comment
  • ETF Stats For February 2015 - Actively Managed Assets Jump 10% [View article]
    I can't think of any that are currency hedged, but a few that only buy USD denominated securities are EMB, EMSH, VWOB, PCY, and COBO. A couple others that I haven't checked but may be USD based are EMCB, CEMB, and EMHY.
    Mar 8, 2015. 11:37 AM | Likes Like |Link to Comment
  • Tuttle Tactical U.S. Core ETF Leads The Burgeoning 'ETF Of ETFs' Space [View article]
    I guess I have a different perspective on this. I believe that Fund-of-Fund products and active tactical management are a natural fit. Additionally, it is important to look beyond the name to determine if it is a tactical product. There are many examples in this arena, such as AdvisorShares Accuvest Global Long/Short (AGLS) launched in 2010, AdvisorShares EquityPro (EPRO), FWDB, MATH, DBIZ, QEH, VEGA, MULT, DWAT, and GMOM to name a few. TOTL is not a fund-of-funds product. I do not know if the headline is yours or SeekingAlpha's, but I am not aware of any data supporting the notion that TUTT "leads" this space.
    Mar 6, 2015. 09:40 AM | Likes Like |Link to Comment
  • Alerian MLP ETF Finally Admits Its 8% Expense Ratio [View article]
    Lehman was the issuer of three Opta ETFs (one Ag, one broad commodity, and one private equity). Up until a day before the bankruptcy, these ETNs could be redeemed for cash at their full value. There is no long-term credit risk with ETNs since they can be redeemed at full value. However, there is short-term credit risk, and in the case of Lehman and its three ETNs, that risk became a reality once it declared bankruptcy.

    The potential for a Lehman failure was in the headlines for weeks and months prior. There was plenty of opp for everyone to get out of their positions for full value. However, a bankruptcy like Lehman had never happened before and so no one really thought through the consequences.

    ETNs track their index minus a tracking fee (typically 0.85%). Credit risk is not part of the equation. As long as the creation/redemption mechanism is functioning, you should be able to sell at full value.

    There is not any risk priced into these instruments. Any "yield expansion" due to credit concerns is not an accurate statement. I would be a buyer under those circumstances since I know I can redeem at full value.
    Mar 6, 2015. 09:11 AM | Likes Like |Link to Comment
  • Alerian MLP ETF Finally Admits Its 8% Expense Ratio [View article]
    Not true. The difference is in the expense ratios. ETNs typically have an E/R around 0.85% while MLP ETFs have 0.85% PLUS ~ 7% in taxes.
    Mar 6, 2015. 08:58 AM | Likes Like |Link to Comment
  • Can The Alerian MLP ETF And Its 8% Expense Ratio Really Be Trusted Anymore? [View article]
    I believe it is a simple case of being "blinded by the yield", and as you say many are "defensive" about it (or in denial, or just trying to justify their purchase).

    In a standard ETF, expenses are taken from the dividend stream. For example, an index with a 2.5% yield would result in an ETF with a 2.1% yield after a hypothetical 0.4% expense ratio).

    These MLP ETFs do not do that though, otherwise their yield would be negtive. The income tax expenses are taken from the capital gains, which ironically makes the yield appear even larger).
    Feb 26, 2015. 08:03 AM | 1 Like Like |Link to Comment
  • Can The Alerian MLP ETF And Its 8% Expense Ratio Really Be Trusted Anymore? [View article]
    Yes, the NAV is adjusted daily. However, the annual percentage amount is not known in advance, but the DAILY percentage amount is known (and the annual then becomes path dependent). The NAV is essentially clipped by 38% of its daily move - a $1.00 move in the index results in a $0.62 move in the ETF's NAV (in either direction).

    So yes, the yield is just a mirage as the capital loss has historically been more than the annual dividend.
    Feb 25, 2015. 08:30 AM | 1 Like Like |Link to Comment
  • ETF Deathwatch For February 2015: Closures Reduce The List [View article]
    Hmmm, not sure why. It seems to be working okay for me.
    Feb 13, 2015. 01:12 PM | Likes Like |Link to Comment
  • HIPS: A New Take On High-Income, Multi-Asset ETFs [View article]
    birder, the video on the home page was just recently added. You can click on other tabs to get traditional info:

    Joseph, good review. I am intrigued by this ETF also. I estimated the fund's yield at 6.5% (7.4% index yield - 0.9% e/r), of course the index yield going forward will likely change.
    Feb 11, 2015. 09:52 AM | Likes Like |Link to Comment
  • Complete List Of 205 New ETPs For 2014 [View article]
    Yes, look for the "5" in the notes column as a place to start. You can sort the list by any column if you go directly to my website.
    Jan 30, 2015. 09:51 AM | Likes Like |Link to Comment