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Tom Lydon

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  • ETF Spotlight: High-Yield Corporate Bonds [View article]

    HYG holds domestically issued high-yield bonds. High-yield bonds trade like any risky investment or security, which will fluctuate during times of high market volatility.

    Investors deciding between JNK and HYG may take into consideration the holdings, credit rating exposure, coupon rate, average maturity, sector allocations and expense ratio to determine if the ETF fits with your investment portfolio and time horizon. We've done an ETF spotlight on JNK before:
    Apr 30 01:03 PM | Likes Like |Link to Comment
  • Dividend ETFs: How To Select A Winner [View article]

    If you bought these two funds in 2005 or 2006 when they first started trading, your dividend payouts would have risen with the exception of the year following the financial crisis. These two funds regularly rebalance to include individual stock holdings that exhibit high yield characteristics. As such, if the over stock market is producing higher dividend yields, then these two funds should reflect that increase in dividends, as well. ETF providers include distribution or ETF performance pages for each of their ETF offerings. If you would like a more detailed or longer dated history, you can always email the providers for more information. Additionally, Yahoo! Finance includes a "dividends only" option when looking at an ETF's historical prices.
    Apr 27 01:35 PM | Likes Like |Link to Comment
  • Dividend ETFs In Focus As Companies Raise Payouts [View article]
    In the equities market, REITs, preferred stock and international stock ETFs offer high dividend yields. However, it should be noted that preferred stocks and international stock ETFs that do offer high yields will be heavily weighted toward the financials sector, which limits a portfolio's diversification prospects. If you would like to search for more specific ETFs, try using our ETF analyzer:
    Apr 10 12:35 PM | Likes Like |Link to Comment
  • One Month After Launch, PIMCO Total Return ETF Lives Up To The Hype [View article]

    On the PIMCO's BOND page, as of April 3, the provider shows a SEC 30-day yield of 2.57% and an estimated yield of maturity of 4.47% - BOND has an effective maturity of 6.67 years and an effective duration of 4.71 years. As of March 31, the distribution yield was 1.44%.
    Apr 4 04:32 PM | 2 Likes Like |Link to Comment
  • The Bullish Case For Gold ETFs [View article]
    The bullish case for gold remains a long-term view. As a result of the loose monetary policies, expected inflation will rise in many economies. Investment demand has increased year-over-year and demand for the physical metals are up - the growing middle class in the emerging markets, particularly China and India, will remain strong drivers of physical gold demand. Additionally, central banks are using gold as another form of hard currency, diversifying away from foreign currencies.
    Apr 2 01:19 PM | Likes Like |Link to Comment
  • New Agriculture ETF Takes Root [View article]
    TAGS's underlying holdings/funds - CORN, SOYB, CANE, WEAT - were each designed to mitigate the effects of backwardation or cotango on their performances. Instead of fully allocating their whole portfolio into the next month's contracts, each of the four underlying funds spread out their futures contracts allocations. For instance, they take on a 35% weighting in second-to-expire futures, 30% weighting in third-to-expire futures and a 35% weighting in the futures contract expiring in another month following the third-to-expire contract.
    Apr 2 01:17 PM | Likes Like |Link to Comment
  • Diving Into Water ETFs [View article]
    ETF critics have been contending that niche/specialized ETFs are "gimmicky," or were only created to collect money from investors and not necessarily created to generate returns for investors. However, the long-term performance seems to indicate otherwise. For instance, PHO is up 15.6% over the past three years. Water scarcity is a real issue, and companies are still developing new methods to efficiently supply the world with H2O.
    Mar 29 01:38 PM | Likes Like |Link to Comment
  • Axel Merk Plans Hard Currency ETF [View article]
    It still remains unclear what the ETF yield will be. When the ETF product launches, it typically takes a month before providers disclose yields.

    The Merk Hard Currency Fund (MERKX) currently has a 1.58% yield.
    Mar 29 01:37 PM | Likes Like |Link to Comment
  • ETF Spotlight: iShares MSCI Thailand [View article]

    ETFs are traded on an exchange like any regular stock. As such, investors may use any trading technique utilized with stocks, including short trades. However, you can only short an ETF if your brokerage account or plan allows shorting, as many do not.
    Mar 22 02:12 PM | Likes Like |Link to Comment
  • iShares Readies Active Fixed-Income ETFs [View article]
    Hi galhacham,

    Since the ETF is basically another version of the PIMCO Total Return fund, it is safe to assume that the ETF will offer some kind of payout similar to that of the original flagship fund. Yield "data will be available one month after fund's listing date," according to the PIMCO site.
    Mar 21 01:34 PM | Likes Like |Link to Comment
  • Bond Manager Blasts Fixed-Income ETFs [View article]
    Hi John,

    You can take a look at our coverage of the EMCB launch here:
    Mar 20 03:09 PM | Likes Like |Link to Comment
  • ETF Price Wars: Round 2 [View article]
    Hi John,

    Emerging market funds tend to run higher expense ratios because of the added costs in accessing these generally illiquid, hard-to-reach markets.
    Mar 20 03:08 PM | Likes Like |Link to Comment
  • Gold Miner ETFs Lose Their Luster [View article]
    Hi januslee,

    Each ETF provider has a different method in screening and selecting constituent holdings based on their own set criteria. Before an ETF is marketed, the fund will have its holdings and allocations accounted for. Any investor can check for specific holdings on new ETF product launches through their respective provider websites.
    Mar 19 02:45 PM | Likes Like |Link to Comment
  • ETF Spotlight: iShares S&P 500 [View article]
    Hi Wayne,

    The equal-weight methodology helps give smaller companies a greater say in the direction of the fund. SPY is a large-cap weighted ETF, so the larger companies will have a larger affect on the fund. RSP and other equal-weight S&P 500 ETFs have a higher weighting in small-cap and mid-cap companies. If you believe that smaller companies will do better in the initial stages of our economic recovery, which has historically been the case, then you might consider an equal-weight ETF.
    Mar 19 02:44 PM | 1 Like Like |Link to Comment
  • PIMCO Total Return ETF Sees Solid Volume, Tight Spreads on First Day [View article]

    galhacham, TRXT began trading on March 1, and it has not had time to properly distribute yields. The fund currently does not show a 30-day SEC yield.

    Bevelegg, the original Total Return fund may trade in derivatives and swaps, like the default swaps that large institutional players are using to hedge against the Greece problem. However, the Total Return ETF can only hold bonds and forwards - the ETF version may not use futures, options or swaps. Additionally, the Total Return A share class (PTTAX) has an expense ratio of 0.90%, whereas the Total Return ETF (TRXT) has an expense ratio of 0.55%.
    Mar 13 12:50 PM | Likes Like |Link to Comment