All ETF Portfolio

Stocks Are Moving In Lock Step

2010-09-23T21:27:00.001-05:00

Wall Street Journal article on how macro forces began moving stocks in a big way since 2008 making it harder for stock pickers.

"A host of other factors is contributing to the macro trend. The rise of exchange-traded funds, which typically track broad market indexes or benchmarks, has made it easier for investors to make broad bets on commodities, bonds and currencies. Such funds now account for 30% of daily stock-trading volume"

Link to WSJ article

Bankers Pushing Wealthy To Invest In Emerging Markets

2010-09-18T17:47:00.001-05:00

From this morning's Barron's:

Bankers are pushing wealthy families to put more money in emerging markets

"For many private bankers, the key to convincing conservative investors to build positions in emerging markets is to show that a long-term structural change is under way in the world economy. In the second decade of the 21st century, investing in emerging markets is more than just a bet on the regions' turbo-charged economic growth. Rather, it's a way of offsetting excessive exposure to U.S. markets that appear trapped in a trading range; a home economy that, at best, may grow a few percentage points a year; and a domestic currency that seems doomed to lag as governments stagger under heavy deficits"

"It's easier to contemplate a significant allocation to emerging markets today than it was a decade or so ago, thanks to the proliferation of exchange-traded funds and other investment products."

Link to article (subscription required)

Risks of Single Country ETFs

2010-09-04T17:01:00.001-05:00

Wall Street Journal published an article about the risks of investing in single country ETFs pointing out that in many of these funds "a large percentage of the assets are invested in only a few stocks or sectors. Returns are magnified when those companies or sectors perform well, but so are losses when the underlying investments do badly. Amplifying the dangers, foreign economies and political situations are by definition harder for the average U.S. investor to research and follow closely."

Worth the read. Link to the article

Also worth reading is Random Roger's comments on the same article.

Frontier Markets

2010-07-11T07:46:00.001-05:00

Two similar articles about investing in frontier markets in NY Times and LA Times

All ETF 401Ks are coming

2010-06-03T20:25:00.001-05:00

From ETF Trends:

"How can companies and employees get ETFs into their 401(k) plan?

You can start by asking for them to be added to your current plan or by seeking out providers that offer them. I've often referred to this as the "I want my MTV" phenomenon. In the 1980s, customers had to ask their cable carriers to offer MTV and, after a few years, MTV became a cornerstone of cable TV."

Link to All ETF 401Ks article

6 All ETF Portfolios from CNBC

2010-05-19T18:39:00.005-05:00

Bob Pisani from CNBC asks three ETF experts to assemble model ETF Portfolios. They come up with 6 all etf portfolios:

- Diversified Global Core
- Global Bull
- Global Sideways Market
- Global Bear
- Emerging Markets
- Rising Inflation

Link to ETF holdings above

Also see Random Roger's take on them.

Flash Crash May Prove Blemish for ETFs

2010-05-13T06:34:00.002-05:00

From Wall Street Journal

"One fourth of all ETFs saw suspicious declines after the market began its slide at about 2pm EDT."

"To be sure, ETF companies reacted quickly to the chaos, in many cases calling and emailing investors like financial advisers with instructions on how to break clearly erroneous trades and offering quick accounts of how some funds' pricing mechanisms might have been affected by a wave of faulty-seeming price quotes."

Link to the article

Lazy Man's ETF Portfolio

2010-05-02T19:33:00.001-05:00

"Here we'll provide the lazy man's version (not a bad idea given simplicity and savings), which is four exchange traded funds. For fun, we'll also pick one stock from each ETF's top holdings."

Link to Investopedia article

Hidden Tax Traps Inside ETFs

2010-04-17T07:41:00.001-05:00

A great article in Wall Street Journal about how paper profits are taxed in commodity and currency ETFs. GLD is one example. It's taxed at 28% rate even if you hold it more than a year.

"You shouldn't invest in a commodity or currency ETF at all unless you "thoroughly understand what type of income the transaction will generate and what your tax rate will be"

Link to the article

Top 10 Hottest ETFs – March 2010

2010-04-02T07:20:00.001-05:00

10 ETFs with the highest overall return in March

10 Reasons to Love ETFs

2010-03-22T21:08:00.001-05:00

- You can sell it whenever you want
- Choices = Diversification
- ETFs give you power

and more reasons at ETF Trends

New Leveraged International ETFs are coming

2010-03-07T18:20:00.001-06:00

"ProShares is cooking up some new ETFs for those investors seeking more leveraged and inverse exposure to international markets and regional banks. The list includes seven funds targeting international markets...."

The new leveraged international ETFs are:

Ultra MSCI Brazil
Ultra MSCI Pacific ex-Japan
Ultra MSCI Europe
Ultra MSCI Mexico Investable Market

Link to Seeking Alpha article

Is All-ETF Portfolio a Good Idea?

2010-02-16T20:20:00.001-06:00

"Basically, there are two ways to play the all-ETF portfolio. Broad, or seeking ETFs that have securities that run the gamut from micro to large, international emerging markets, single country, bonds and commodities, explains Michael Iachini, director, Charles Schwab Investment Advisory"

"The best solution, Connors says, is a professionally managed portfolio that is globally diversified across broad asset classes that precisely invest in companies by size and style. "Investors should make sure that each asset class provides a diversification benefit to reduce overall portfolio volatility. The mix between equity and fixed income exposure (for example, 60% equity allocation) is of paramount importance to an investor and should be designed to mirror an investor's risk tolerance," he adds."

Link to Daily Finance article

Soros Doubles Gold ETF investment

2010-02-16T19:30:00.001-06:00

"Billionaire investor George Soros' hedge fund more than doubled its bet on the price of gold during the fourth quarter, a portion of the firm's total U.S.-listed equity holdings of $8.8 billion at the end of 2009."

"Soros Fund Management owned 6.2 million shares of SPDR Gold Trust (GLD) -- an exchange-traded fund that owns gold bullion -- at the end of the year worth $663 million. That was up from 2.5 million shares at the end of the third quarter."

Link to Reuters article

New Leveraged ETFs

2010-02-12T19:26:00.002-06:00

"FactorShares has filed to launch six funds that give a twist on the traditional leveraged and inverse ETF formula. FactorShares' new ETFs would essentially be a leveraged bet on the spread between two indexes, one of which is always the S&P 500"

ETF Trends article

Free ETF trading at Fidelity

2010-02-07T15:22:00.001-06:00

25 iShares ETFs can be traded commission-free at Fidelity.

"The funds track wide swaths of the market for U.S. and international stocks. Five bond ETFs are also in the mix. The group includes iShares S&P 500 Index Fund IVV , iShares MSCI EAFE Index Fund EFA and iShares Barclays Aggregate Bond Fund AGG"

Link to MarketWatch article

ETFs causing Emerging Market Bubble?

2009-11-07T12:28:00.001-06:00

Wall Street Journal article says investors put in $15B into emerging market funds through ETFs this year.

"Several hedge-fund managers and other active stockpickers have told me that this "mindless money" is distorting valuations and pumping up a potentially monstrous bubble."

"Consider Brazil. The iShares MSCI Brazil Index ETF has nearly tripled in size over the past 12 months. Now at $10.9 billion in assets, it has vacuumed up $2 billion in new money this year. Fully 38% of the fund is invested in only two firms: oil giant PetroBras and mining company Vale do Rio Doce".

Hedging with Leveraged ETFs

2009-10-28T06:04:00.001-05:00

Wall Street Journal article on hedging with leveraged ETFs

Building ETF Portfolios Based on Momentum

2009-09-12T15:57:00.001-05:00

Scott's Investments blog writes about alternative strategies to "buy and hold" using low-cost ETF portfolios based on 200 day moving averages (buy when the ETF trades above the average, sell when it goes below).

Link to the article which includes some model ETF portfolios.

Beware of Funds Pitching Absolute Returns

2009-09-06T13:10:00.001-05:00

Absolute return funds are about to flood the market. Here's a good advice by Forbes:

"Our advice: Forget absolute-return funds and instead allocate your assets the old-fashioned way. That means investing the portion of your assets you can afford to put at risk in a low-cost index fund or ETF. Put the rest in similar vehicles that own a mix of corporate and government bonds or have a bit of commodity exposure. That will smooth the bumps just fine, but a far bigger portion of the returns will end up in your pocket and a far smaller one in the pocket of a money manager."

Link to the article

Investors dive into bond ETFs

2009-08-09T12:07:00.001-05:00

"Nervous investors burned by the stock-market meltdown are piling into bond exchange-traded funds in an effort to tone down risk and generate stable income."

Link to MarketWatch article

Leveraged ETFs Under Fire

2009-07-30T18:46:00.000-05:00

Wall Street Journal is reporting that Morgan Stanley Smith Barney is reviewing how it sells leveraged ETFs and Charles Schwab issued a warning to clients who buy them. They've also posted an article titled "Leveraged and Inverse ETFs: Not Right for Everyone"

UBS suspended leveraged ETF purchases couple of days earlier "citing their short-term nature".

"The Financial Industry Regulatory Authority in June issued a reminder to brokers and advisers, urging them to use care in selling inverse and leveraged ETFs. Finra noted that the instruments are complex and typically unsuitable for individual investors who plan to hold them longer than one trading session."

I'm sure there's a place for leveraged ETFs in some portfolios. I wouldn't want to see them disappear altogether.

4 Reasons ETFs are Gaining on Mutual Funds

2009-04-18T18:29:00.003-05:00

ETF Guide article on why ETFs are gaining on mutual funds:

1. 100% Financial transparency
2. Intraday liquidity
3. No short term redemption fees
4. Greater financial flexibility

3 Model ETF Portfolios

2009-04-17T14:52:00.001-05:00

ETFs: Watch and Learn How to Invest by Bob Pisani

Future of ETFs

2009-03-31T15:27:00.001-05:00

Forbes just published a series of articles on ETFs including one on how ETFs are gaining market share at the expense of mutual funds.

"ETFs with their liquidity, transparency and cost efficiency are making their way to frontline investors"