Will McClatchy at ETFzone.com's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/87061/comments http://seekingalpha.com/article/86457-light-and-sweet-oil-etfs-ranked?source=feed#comment-212855 212855
There is a recent surge in speculation, no doubt about it, and at least temporarily that has to have impacted prices. Long-term it should stimulate production of all types of energy and not affect prices so dramatically. I suspect that the big institutional funds serving pension plans will simply go to London and trade Brent Sea crude or Middle Eastern varieties, and these funds represent the lion's share of the financial buyers (not oil industry players) in the market. Smaller amounts of capital in the hands of individual investors may be dissuaded. USO and OIL use wait until the regulators come knocking on the door but they are simply long at all times. I am having a hard time picturing how regulators could put the ETFs out of business without yanking many, many other players with vast amounts of capital out of the futures markets. Seems unlikely to me. Hope that helps.

-Will McClatchy]]> Wed, 23 Jul 2008 21:40:10 -0400
There is a recent surge in speculation, no doubt about it, and at least temporarily that has to have impacted prices. Long-term it should stimulate production of all types of energy and not affect prices so dramatically. I suspect that the big institutional funds serving pension plans will simply go to London and trade Brent Sea crude or Middle Eastern varieties, and these funds represent the lion's share of the financial buyers (not oil industry players) in the market. Smaller amounts of capital in the hands of individual investors may be dissuaded. USO and OIL use wait until the regulators come knocking on the door but they are simply long at all times. I am having a hard time picturing how regulators could put the ETFs out of business without yanking many, many other players with vast amounts of capital out of the futures markets. Seems unlikely to me. Hope that helps.

-Will McClatchy]]> http://seekingalpha.com/article/58342-ici-pushes-congress-to-punish-etn-investors-for-not-choosing-mutual-funds?source=feed#comment-107091 107091 Thu, 27 Dec 2007 16:08:51 -0500 http://seekingalpha.com/article/54892-30-etfs-with-the-highest-short-interest-ratios?source=feed#comment-103061 103061
will@etfzone.com

]]> Mon, 26 Nov 2007 13:24:11 -0500
will@etfzone.com

]]> http://seekingalpha.com/article/41597-sinking-dollar-presents-great-currency-etf-opportunities?source=feed#comment-91728 91728
It is, however, folly to suggest that long-term investors should invest in foreign assets BECAUSE the dollar has fallen for many years in a row. That is, while it is quite possible or even likely the dollar will go down a bit more, the more the dollar underperforms the more likely it is to return to historic performance. This is not the same as calling it to reverse, but it is a strong caution.

Since you do not mention what strategy or audience you are talking to, your comments are surely valid for some investors. But if they are meant for the trader, you do not provide the targets and time periods useful for the trader (where will the dollar bottom out and when?). For the typical passive long-term investor, overweighting international heavily now is frankly dangerous.

Will McClatchy
Editor
ETFzone.com]]> Fri, 20 Jul 2007 18:43:54 -0400
It is, however, folly to suggest that long-term investors should invest in foreign assets BECAUSE the dollar has fallen for many years in a row. That is, while it is quite possible or even likely the dollar will go down a bit more, the more the dollar underperforms the more likely it is to return to historic performance. This is not the same as calling it to reverse, but it is a strong caution.

Since you do not mention what strategy or audience you are talking to, your comments are surely valid for some investors. But if they are meant for the trader, you do not provide the targets and time periods useful for the trader (where will the dollar bottom out and when?). For the typical passive long-term investor, overweighting international heavily now is frankly dangerous.

Will McClatchy
Editor
ETFzone.com]]> http://seekingalpha.com/article/40591-response-to-roger-nusbaum-on-bond-etfs?source=feed#comment-90850 90850 Tue, 10 Jul 2007 21:23:46 -0400 http://seekingalpha.com/article/40591-response-to-roger-nusbaum-on-bond-etfs?source=feed#comment-90849 90849 Tue, 10 Jul 2007 21:19:01 -0400 http://seekingalpha.com/article/40591-response-to-roger-nusbaum-on-bond-etfs?source=feed#comment-90840 90840 Tue, 10 Jul 2007 18:18:17 -0400 http://seekingalpha.com/article/40591-response-to-roger-nusbaum-on-bond-etfs?source=feed#comment-90838 90838
I am happy to be in the minority. ETFzone considers its main mission to dispelling myths regarding ETFs. Let's follow your example in your blog:

"If the yield on the ten year was 6% and you thought that was pretty good, you risk getting a lower rate with GKD if the yield in the marketplace goes down. That which might yield 6% today could yield 4% next year. If you buy an individual treasury, your yield will be whatever it was when you bought it -- which makes managing this portion of your portfolio much easier."

After one year GKD, which maintains a constant 10-year average maturity, still has a 10-year maturity. But the individual Treasury is now equivalent to a 9-Year maturity because it has 9 years left. If as you say the marketplace yield (essentially interest rate) for a 10-year bond goes from 6% to 4%, then the value of both holdings will rise, because both entitle the holder to many more years of 2% higher-than-market interest. The longer maturity GKD will get a bit more of a boost from its extra year. So actually, in your example GKD is the winner at that moment in time. Each month at Treasury auction as GKD turns over its holdings for new 10 year Treasuries, GKD takes its winnings (or losses) and plows them into the next batch.

I have no idea what you mean by "variable rate aspect to the treasury portion of a fixed income portfolio". GKD is not a variable rate product. It contains only fixed rate 10-year Treasuries. It does turn over its portfolio to maintain that 10-year duration, but that is not a variable rate as most people understand it.

My main point is that investors need to be clear whether they are maintaining a portfolio with set asset allocation targets, or if they are saving for a balloon payment or steady income over a known period. Most pension funds asset allocate with set targets, as do most investors saving for retirement. Clearly if one is saving for balloon payments such as college education or if one has set income requirements over a known period and no longer, then an individual bond is perfect. But when you essentially say that "average" investors should not asset allocate with bonds, I worry about how that advice will be taken.]]> Tue, 10 Jul 2007 18:16:35 -0400
I am happy to be in the minority. ETFzone considers its main mission to dispelling myths regarding ETFs. Let's follow your example in your blog:

"If the yield on the ten year was 6% and you thought that was pretty good, you risk getting a lower rate with GKD if the yield in the marketplace goes down. That which might yield 6% today could yield 4% next year. If you buy an individual treasury, your yield will be whatever it was when you bought it -- which makes managing this portion of your portfolio much easier."

After one year GKD, which maintains a constant 10-year average maturity, still has a 10-year maturity. But the individual Treasury is now equivalent to a 9-Year maturity because it has 9 years left. If as you say the marketplace yield (essentially interest rate) for a 10-year bond goes from 6% to 4%, then the value of both holdings will rise, because both entitle the holder to many more years of 2% higher-than-market interest. The longer maturity GKD will get a bit more of a boost from its extra year. So actually, in your example GKD is the winner at that moment in time. Each month at Treasury auction as GKD turns over its holdings for new 10 year Treasuries, GKD takes its winnings (or losses) and plows them into the next batch.

I have no idea what you mean by "variable rate aspect to the treasury portion of a fixed income portfolio". GKD is not a variable rate product. It contains only fixed rate 10-year Treasuries. It does turn over its portfolio to maintain that 10-year duration, but that is not a variable rate as most people understand it.

My main point is that investors need to be clear whether they are maintaining a portfolio with set asset allocation targets, or if they are saving for a balloon payment or steady income over a known period. Most pension funds asset allocate with set targets, as do most investors saving for retirement. Clearly if one is saving for balloon payments such as college education or if one has set income requirements over a known period and no longer, then an individual bond is perfect. But when you essentially say that "average" investors should not asset allocate with bonds, I worry about how that advice will be taken.]]>