The Ins And Outs Of An Equal-Weighted ETF [View article]
Hi,
As part of an equities portfolio, if you are holding other stocks or equity ETFs, you may find some overlaps. For instance, if you are supplementing your portfolio with a sector ETF, you may have a higher exposure to particular company stocks.
Even if you only have one broad stock ETF as your exposure to the equities market, it is important to still keep an eye on what the fund is doing.
The CurrencyShares Euro Trust ETF (FXE) and the iPath EUR/USD Exchange Rate ETN (ERO) provides the long view on the euro against the U.S. dollar.
If you want to take a more aggressive approach, there are inverse/leveraged options available, such as the ProShares Short Euro (EUFX), ProShares UltraShort Euro ETF (EUO), ProShares Ultra Euro ETF (ULE), Market Vectors Double Short Euro ETN (DRR) and Market Vectors Double Long Euro ETN (URR). These should not be used as long-term holdings.
Germany ETF Rises As DAX Challenges All-Time High [View article]
Hi,
The point you made is true, but they are also different based on their component holdings - the DAX is a separate index from the MSCI Germany Index. There is no U.S.-listed ETF based on the DAX.
Inverse Treasury ETFs Rally As Bonds Off To Worst Start In Years [View article]
Hi,
Unlike passive index ETFs, inverse/leveraged funds typically rebalance on a daily basis - they add or reduce positions to realign exposure to the underlying index day-to-day. Due to the compounding effects of these rebalances over a long period of time, investors can see that the performance does not perfectly reflect being inverse or leveraged the underlying index over an extended period. So, the longer the period, the greater the potential disparity. Consequently, investors should be sure to carefully monitor these funds and not use them as a set-and-forget type investment.
A Closer Look At 2 New Volatility-Hedged ETFs [View article]
Hi,
Since ETNs are treated as a type of prepaid contract, the investment vehicle does not have any tracking errors. In contrast, ETFs hold a basket of securities from a benchmark index.
An ETN provider may also decide to withhold new shares, which would push up premiums on the ETN as compared to the NAV if demand is high enough.
However, ETNs come with credit risk because the funds are an unsecured debt instrument and can default if the issuing bank gets into trouble.
2 Chile ETFs For A Diversified Commodity Play [View article]
Hi,
ECH and CH are two different investment vehicles. ECH is an ETF, whereas CH is a closed-end fund. As a CEF, CH can trade at a discount or premium to its NAV - it's currently at a 1.27% discount.
Moreover, according to Morningstar, ECH has a 0.59% expense ratio, compared to CH's 2.0% total expense ratio reported for 2011.
Looking at top sector holdings, CH has basic materials 19.6%, financials 16.9%, industrials 25.8% and consumer staples 15.9%. Meanwhile, ECH has industrials 28.8%, utilities 20.3%, financial services 17.6%, basic materials 9.2%.
Defined Maturity Bond ETFs Have Room To Grow [View article]
Hi,
Defined maturity ETFs have a designated year of maturity. For instance, BSCC will terminate around Dec. 31, 2012.
In the last six months of operation, the funds will start transitioning to cash and cash equivalents. Once they terminate, the funds will distribute the cash to shareholders.
An ETF Approach To U.S. Dividend Stocks [View article]
Hi stall,
DTD is based off a modified cap-weighted index that tracks large-cap dividend paying U.S. stocks, which may include REITs.
SPLV is more focused on stocks selected from the S&P 500 that exhibit low levels of volatility - this ETF holds 100 stocks from the S&P index that has shown the lowest relative volatility over the past year.
Access Institutional Quality Management Through Multi-Asset ETFs [View article]
Hi,
Before picking one of these ETFs, it is important to consider what level of exposure you are comfortable with, as the weightings between sectors and bond allocations may differ. While you can diversify with multiple multi-asset ETFs, specific holdings, such as underlying company stocks, may overlap between two multi-asset ETFs, so you need to mind your overall exposure to a single company or sector.
The Ins And Outs Of An Equal-Weighted ETF [View article]
As part of an equities portfolio, if you are holding other stocks or equity ETFs, you may find some overlaps. For instance, if you are supplementing your portfolio with a sector ETF, you may have a higher exposure to particular company stocks.
Even if you only have one broad stock ETF as your exposure to the equities market, it is important to still keep an eye on what the fund is doing.
Best regards,
Tom
Currency Diversification With ETFs [View article]
The CurrencyShares Euro Trust ETF (FXE) and the iPath EUR/USD Exchange Rate ETN (ERO) provides the long view on the euro against the U.S. dollar.
If you want to take a more aggressive approach, there are inverse/leveraged options available, such as the ProShares Short Euro (EUFX), ProShares UltraShort Euro ETF (EUO), ProShares Ultra Euro ETF (ULE), Market Vectors Double Short Euro ETN (DRR) and Market Vectors Double Long Euro ETN (URR). These should not be used as long-term holdings.
Best regards,
Tom
Germany ETF Rises As DAX Challenges All-Time High [View article]
The point you made is true, but they are also different based on their component holdings - the DAX is a separate index from the MSCI Germany Index. There is no U.S.-listed ETF based on the DAX.
Best regards,
Tom
Inverse Treasury ETFs Rally As Bonds Off To Worst Start In Years [View article]
Unlike passive index ETFs, inverse/leveraged funds typically rebalance on a daily basis - they add or reduce positions to realign exposure to the underlying index day-to-day. Due to the compounding effects of these rebalances over a long period of time, investors can see that the performance does not perfectly reflect being inverse or leveraged the underlying index over an extended period. So, the longer the period, the greater the potential disparity. Consequently, investors should be sure to carefully monitor these funds and not use them as a set-and-forget type investment.
Best regards,
Tom
A Closer Look At 2 New Volatility-Hedged ETFs [View article]
Since ETNs are treated as a type of prepaid contract, the investment vehicle does not have any tracking errors. In contrast, ETFs hold a basket of securities from a benchmark index.
An ETN provider may also decide to withhold new shares, which would push up premiums on the ETN as compared to the NAV if demand is high enough.
However, ETNs come with credit risk because the funds are an unsecured debt instrument and can default if the issuing bank gets into trouble.
Best regards,
Tom
2 Chile ETFs For A Diversified Commodity Play [View article]
ECH and CH are two different investment vehicles. ECH is an ETF, whereas CH is a closed-end fund. As a CEF, CH can trade at a discount or premium to its NAV - it's currently at a 1.27% discount.
Moreover, according to Morningstar, ECH has a 0.59% expense ratio, compared to CH's 2.0% total expense ratio reported for 2011.
Looking at top sector holdings, CH has basic materials 19.6%, financials 16.9%, industrials 25.8% and consumer staples 15.9%. Meanwhile, ECH has industrials 28.8%, utilities 20.3%, financial services 17.6%, basic materials 9.2%.
Hope this helps.
Tom
Short-Term Bond ETFs In Focus On Money Fund Reform Talk [View article]
There are articles on the BulletShares ETFs, along with other articles on defined maturity ETFs at the ETFTrends.com site.
http://bit.ly/Vbwgwv
http://bit.ly/RoD24o
Best regards,
Tom
Obamacare Is Unhealthy For Medical Devices ETFs [View article]
Best regards,
Tom
An Emerging Market Bond ETF With A 6.5% Yield [View article]
BBB-/Baa3 bonds are considered low investment grade, and the bonds rated BB+/Ba1 and lower are non-investment grade, speculative or "junk."
Best regards,
Tom
Defined Maturity Bond ETFs Have Room To Grow [View article]
Defined maturity ETFs have a designated year of maturity. For instance, BSCC will terminate around Dec. 31, 2012.
In the last six months of operation, the funds will start transitioning to cash and cash equivalents. Once they terminate, the funds will distribute the cash to shareholders.
Best regards,
Tom
An ETF Approach To U.S. Dividend Stocks [View article]
DTD is based off a modified cap-weighted index that tracks large-cap dividend paying U.S. stocks, which may include REITs.
SPLV is more focused on stocks selected from the S&P 500 that exhibit low levels of volatility - this ETF holds 100 stocks from the S&P index that has shown the lowest relative volatility over the past year.
Best regards,
Tom
ETF Spotlight: Vanguard Total Bond Market [View article]
As of the end of June, Vanguard is the third largest ETF provider, with $208.3 billion in ETF assets under management.
All the best,
Tom
Diamonds On The Soles Of Her ETF: IndexIQ Files For First Physical Diamond Trust [View article]
At this time, there is not set date. It is still in SEC filing.
- Tom
Access Institutional Quality Management Through Multi-Asset ETFs [View article]
- Tom
Access Institutional Quality Management Through Multi-Asset ETFs [View article]
Before picking one of these ETFs, it is important to consider what level of exposure you are comfortable with, as the weightings between sectors and bond allocations may differ. While you can diversify with multiple multi-asset ETFs, specific holdings, such as underlying company stocks, may overlap between two multi-asset ETFs, so you need to mind your overall exposure to a single company or sector.
- Tom