Seeking Alpha

Prudent Man CFA » Comments » AWF

  • Long-Short Bond Trade: Now with Reduced Volatility [View article]
    Be very careful with bond ETFs as they are trading, for the most part, in illiquid securities. Their "Authorized Participants" have inordinate power and conflicts of interest as may the sponsor. Many of the sponsors are in dire financial straits themselves which should give investors pause and reason to learn more.

    Ask the sponsor who the Authorized Participants are and who regulates and audits them. Watch how much they are using derivatives in lieu of bonds.

    I like the concept but one must drill into the ETF to ascertain if it is what it says it is and what are the conflicts of interest with the Authorized Participants and, possibly, the sponsor.
    Jan 28 09:30 am |Rating: +3 -1 |Link to Comment
More on AWF by Prudent Man CFA
Comments by Ticker
AA, AAPL, AAXJ, ABI, ABT, ABX, ACH, ACI, ACS, ACTL, ACWI, ADBE, ADM, ADRE, ADSK, AFK, AGG, AHBIF.PK, AIB, AIG, AKP, ALTR, ALVR, ALXN, AMAT, AMD, AMGN, AMLN, AMZN, APA, APC, APOL, AWF, AXP, AZ, AZN, BA, BAC, BBI, BC, BCE, BCS, BFSB, BG, BGU, BGZ, BIDU, BIL, BIV, BK,
Prudent Man CFA is a
Top 100 Commentor
733 comments
Rating: 1348 (2837 - 1489 )