Richard Kang

http://www.thebetabrief.com
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    • Sat Mar 17th 22:17 PM | Rating: 0 0
      Commented on:
      Investable Indices: An Improvement On Hedge Fund Index Investing?
      SV: Of course the
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    • Wed Mar 14th 12:14 PM | Rating: 0 0
      Commented on:
      Evolution and Defensiveness in the ETF Industry
      Thanks PS and DHL. BJ: Think of closed end funds (CEFs) like an ETF in that in trades on an exchange although the underlying strategy is not based on an index. Instead there is a manager who applies some form of active management for the fund. One of the key differences between ETFs and CEFs is that CEFs may have a price on the exchange that deviates significantly from the net asset value of the underlying fund. This premium or discount value is given in various online sources like Yahoo Finance or Google Finance along with the price. CEFs are key considerations for me because sometimes an ETF is unavailable or simply not preferred over a comparable CEF. For example, as much as I like infrastructure as an asset class, and you know I'm a proponent of ETFs, I'm not so keen on the new infrastructure from SSGA. It's not that it isn't good. It's just that certain CEFs from Macquarie traded on the NYSE (MGU, MIC, MFD) may be better choices. If you're willing to accept the added variability (active manager risk) beyond ETFs, then CEFs are worth considering.
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    • Fri Feb 16th 08:20 AM | Rating: 0 0
      Commented on:
      All in All, It's Just Another BRIC in the Wall
      I try to add a bit of color/humor to my writing when possible (tough, cause we're talking beta based portfolio management) and I am a child of the 70s but even I couldn't have pulled together that title. Kudos, SeekingAlpha marketing minds!
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    • Tue Feb 13th 17:37 PM | Rating: 0 0
      Commented on:
      Questioning Jim Cramer On The Merits Of ETFs
      Makes a lot of sense. The only thing I wonder is when you say "... there are many investors with limited financial analysis skills", I don't think we're talking about people with an accounting degree or a CFA - that would be overkill. However, I'm guessing that the vast majority of investors have next to no financial analysis skills. If many people can't keep proper track of their own budget and banking, it's no surprise that they don't do break open the annual reports for company stocks that they hold, never mind calculating some basic ratios from the financial statements. Luckily, we're at a time when the internet allows for free and easy access to information (too much, really) so that keen investors can make decisions in ways you've suggested, PM. But despite this, I'm thinking that there may be a growing trend where investors choose to implement their decisoins with ETFs where possible and use direct stock picks as the next best alternative. I'm sure there are vastly more who look at things the other way around but it's the trend that I may (or may not) be right on.
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    • Wed Feb 7th 21:26 PM | Rating: 0 0
      Commented on:
      Comparing Base Metals ETFs
      DT: Click above on "More articles by Richard Kang" and you'll find my email address. Send me an email and I can reply back with the contact name/info for a leading market maker in Europe for these products and will likely be able to help you.
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    • Wed Feb 7th 12:54 PM | Rating: 0 0
      Commented on:
      Comparing Base Metals ETFs
      Thanks Roger
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    • Tue Jan 30th 17:12 PM | Rating: 0 0
      Commented on:
      More on SSGA's New Infrastructure ETF
      Just after getting the notice yesterday of GII's eminent launch, I find today that there's nothing on my screen when I punch up GII. Being the sharp guy that he is, I see on Roger Nusbaum's site (randomroger.blogspot.c...) that he has seen the same. Wouldn't it be funny (I guess not "ha ha" funny over at SSGA) if PowerShares or Claymore quietly launched their infrastructure ETF right about now? No, I don't have anything at all as evidence that either of them, nor anyone else, is working on an infrastructure ETF but something like that would not surprise me at this juncture of the ETF industry's development.
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    • Tue Jan 30th 09:16 AM | Rating: 0 0
      Commented on:
      Are Hedge Funds Driving the ETF Industry?
      Super rich? Take a look at a lot of the large public pension systems as well as university/charitable endowments. These institutions manage money for Joe Public and a LOT of them have some, even significant exposure to hedge funds. Think of every teacher, state employee, municipal employee, union member, etc. Even up here in Canada, the Canada Pension Plan (we're now talking about coverage for every income earning, tax paying citizen) is getting into hedge funds. Whether directly, through some low investment vehicle (structured product with principal guarantee), or indirectly through a large institution, hedge funds are not part of the "super rich" portfolio anymore. Whether for good or bad is another story.
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    • Sun Jan 28th 16:10 PM | Rating: 0 0
      Commented on:
      New Infrastructure ETF From SSGA: A Closer Look
      ZM: The search for yield still has a ways to go as long as central banks keep the trend going and rates stay relatively low. Everyone knows about Japan's ZIRP but the small spread between developed and developing country interest rates is another thing to consider. You see this global search as investors move from place to place looking for yield. Sometimes it's an opportunistic grab, but in other cases opportunities are taken away without much notice. Canadian income trusts and recent changes by the Canadian government on tax treatments of these is a good example and you have also mentioned shippers as another example. In terms of fund offerings (whether ETF or not), you see a lot of new product development with some form of dividend or value bias. WisdomTree is a good example. In fact, all the non-market cap weighted index funds (equal weighted, fundamental weighted, etc.) are all means to play this tilt ... whether designed that way or not.
      I know that many of the very largest pension funds have made significant investments into infrastructure but what about the many more smaller institutions? Are their investment consultants planning or currently implementing similar shifts in allocation? It wouldn't surprise me at all, especially as many investors (including hedge funds) look globally and especially in the emerging markets.
      Bottom line with pensions is that the recent few years of good returns hasn't been strong enough to offset the simultaneous and more significant increase on the liability side of their balance sheet. Modern processes such as "liability driven investing" will drive further interest into areas like infrastructure for these types of extreme scale portfolios.
      Will all this lead to some sort of overdone condition for value stocks and sectors such as infrastructure. Of course that's possible but this "ebb and flow" sine curve is part of the game. That's not for me or one person to comment on but for the market to comment on with their dollars invested.

      C: You're totally right with Hong Kong. I only wonder what proportion of the total fund will be invested in these 4 HK positions. I hear a lot about the major airport, nuclear power plant, highway and water projects in China and these are found in the general mass media like the Economist or CNN so you'd think that a major ETF or CEF like this would somehow participate in a big way. But when you think about it, likely it's the private investment that is more effective in China since it's probably the best way to get in considering the various hurdles (corruption) related.

      VS: Good comments but I'll focus on the fact that you've mentioned energy twice in your comment. Yes, further to my comments on significant product development in the ETF space related to the commodity complex, including both traditional and alternative energy, this could be another play especially if energy infrastructure (including utility companies) comprise a significant proportion of the fund. You have to wonder if the rules of diversification have to be thrown out the window in today's environment. You want to participate in energy and the commodity sectors if you believe more in Jim Rogers versus his naysayers. You want to have exposures to emerging markets because of the strong demographic story, higher overall growth numbers and beyond. You want to get into infrastructure for reasons I've posted above. But all are so highly correlated and probably correlated more than you think with what you already have in your portfolio. There is the school of thought that is very anti-diversification and most (rather all) hedge funds should be thinking this way if they are mandated to be beta-neutral. In other words, they don't build portfolios based on Markowitz MPT. Thus, they do NOT add investments based on their low correlation to other positions in the portfolio. The question is how many investors are thinking opportunistically in this manner? And if we're talking about significant numbers, will this create greater volatility on the upside as well as when the market eventually goes down? VIX is still cheap at just over 11.
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    • Mon Jan 22nd 15:47 PM | Rating: 0 0
      Commented on:
      Vanguard Bond ETFs: No Surprises, Lowest Costs
      JH/MH
      You're both right of course. I've asked the editors to remove the ("VITBX") link after the first table. Hopefully with that revision, this becomes less confusing.
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    • Sun Jan 14th 22:17 PM | Rating: 0 0
      Commented on:
      ETFs Are Hot: Is This Just The Beginning?
      PM
      In this globalized world, correlations seem to be moving higher among asset classes and even active strategies. Thus, in major downturns, I wouldn't be suprised to see something similar to this past summer when most investors were hurt in many parts of their portfolio. Broad market ETFs will obviously fall with the major market indices but it will be interesting to see just how many of the sectors remain relatively buoyant during that time (if any). I don't expect mutual funds to do that well unless it's a fund that either allows some amount of shorting or relatively high cash balances. At the other extreme are the hedge funds. Their performance has been rather lacklustre during the past 4 years' bull market. No surprise there. It is during major market declines that we've seen hedge fund indices perform well compared to the broad equity indices. Whether one's particular hedge fund investment will provide that level of value during a time of severe distress is as hard to predict as one's ability to effectively select the right mutual fund investment.
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    • Tue Dec 26th 20:36 PM | Rating: 0 0
      Commented on:
      First-Ever International Real Estate ETF Launched
      PJ

      I will first admit that even as a practioner of investment/portfolio management, I am far from the best qualified to make comments with regard to taxes. However, your question is an important one as it pertains to asset location ... for most investors as important as asset allocation. Specific to your question, I've always made a rule of thumb that REITs (REIT ETFs or related real estate securities) are to be considered not tax efficient and thus should generally be held in tax deferred accounts. I don't know what RWX will provide in terms of distributions but I would look into how funds like NGREX have done. Something like Morningstar might be able to help provide the data with regard to a list of similar funds for your to do your analysis.
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    • Tue Dec 26th 20:25 PM | Rating: 0 0
      Commented on:
      First-Ever International Real Estate ETF Launched
      RS:
      I'll do you one better. Go to bigcharts.com. There might be an advertisement page that you have to pass through. Once you're in, type RWR at the top of the page and click on the "Advanced Chart" red button. A 1-year chart for RWR will be produced. On the left side, click on the dark blue "Compare To" button. You'll see a drop down menu for market indices as well as a place to enter ticker symbols. Here, in this space, you can enter "NGREX EFA SPY" (of course, without the quotation marks). Then click the orange "Draw Chart" near the top left of the screen.
      You should get this chart (I hope):
      bigcharts.marketwatch....;compidx=aaaaa%3A0&...

      The chart looks rather like March/April 2006. If you change the timeframe on bigcharts to 4 years you see that RWR has had some fairly significant drawdowns (April 2004, August-October 2005, December 2006) however is still well within a channel that began near the end of 2002. Nothing too different from EFA and SPY over this 4 year period. RWR certainly does seem to behave like a high beta stock compared to the S&P 500. Makes me wonder if RWX will behave like a high beta stock within MSCI EAFE. Likely so.
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    • Thu Dec 21st 22:34 PM | Rating: 0 0
      Commented on:
      Water ETFs Are Going Global
      FYI: Just got a note from Palisades Water Index Associates of a news release on the AMEX website further to the above. Some more interesting facts:

      "The Palisades Global Water Index is a modified equal-dollar weighted index comprised of 54 stocks, diversified across 19 economies and 12 currencies. The index is rebalanced each March, June, September and December."
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    • Thu Dec 21st 10:43 AM | Rating: 0 0
      Commented on:
      First-Ever International Real Estate ETF Launched
      The REIT ETF space has been highly skewed (home bias) to the US market with RWR, VNQ and IYR being good examples. So, the news from SSGA on the new ETF (RWX) simply allows investors to diversify globally. I see it like an investor who has an SPY portfolio now adding EFA for broad international exposure.

      With regard to past performance, take a look at this chart (hope this works): bigcharts.marketwatch....;compidx=aaaaa%3A0&...

      This chart is similar to the last chart from my piece above except I have replaced the DJ-Wilshire ex-US Real Estate Securities Index with RWR. As you can hopefully see, RWR has also outperformed the SPY and EFA over this period but not as much as its international counterpart.

      More info on the new ETF can found here: www.ssgafunds.com/etf/...
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