Comments on: Why, Despite Issues, Bond ETFs Are Popular http://www.etftrends.com/2009/10/why-despite-issues-bond-etfs-are-popular.html Keeping a grip on exchange traded funds (ETFs) Fri, 19 Mar 2010 22:07:26 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: jbrown1 http://www.etftrends.com/2009/10/why-despite-issues-bond-etfs-are-popular.html/comment-page-1#comment-5868 jbrown1 Sun, 11 Oct 2009 02:51:53 +0000 http://www.etftrends.com/?p=18658#comment-5868 tom - <br>your coverage on this issue is great. the real issue at hear here is that an ETF can not adequately track illiquid high yield bonds. there are issues in the index that can not be readily traded with sufficient liquidity. as such, this makes the ETF on index' which contain illiquid securities somewhat flawed. however, don't misconstrue my opinion of ETF's or the potential utility of them on index' such as high yield bonds. LQD is another example of an ETF that has experienced its own problems this year as it has consistently traded at a premium over its NAV. while the Journal exposes a problem with these ETF's, it would be more useful to recognize the benefits and shortcomings of these products and be able to exploit them appropriately. for example, as the LQD has traded at a premium it has been possible at times to write in-the-money call options against the underlying so that the option is struck against its NAV rather than the artificially inflated market price.<br><br>best wishes, and thank you again tom –
your coverage on this issue is great. the real issue at hear here is that an ETF can not adequately track illiquid high yield bonds. there are issues in the index that can not be readily traded with sufficient liquidity. as such, this makes the ETF on index' which contain illiquid securities somewhat flawed. however, don't misconstrue my opinion of ETF's or the potential utility of them on index' such as high yield bonds. LQD is another example of an ETF that has experienced its own problems this year as it has consistently traded at a premium over its NAV. while the Journal exposes a problem with these ETF's, it would be more useful to recognize the benefits and shortcomings of these products and be able to exploit them appropriately. for example, as the LQD has traded at a premium it has been possible at times to write in-the-money call options against the underlying so that the option is struck against its NAV rather than the artificially inflated market price.

best wishes, and thank you again

]]> By: jbrown1 http://www.etftrends.com/2009/10/why-despite-issues-bond-etfs-are-popular.html/comment-page-1#comment-5237 jbrown1 Sat, 10 Oct 2009 19:51:53 +0000 http://www.etftrends.com/?p=18658#comment-5237 tom - <br>your coverage on this issue is great. the real issue at hear here is that an ETF can not adequately track illiquid high yield bonds. there are issues in the index that can not be readily traded with sufficient liquidity. as such, this makes the ETF on index' which contain illiquid securities somewhat flawed. however, don't misconstrue my opinion of ETF's or the potential utility of them on index' such as high yield bonds. LQD is another example of an ETF that has experienced its own problems this year as it has consistently traded at a premium over its NAV. while the Journal exposes a problem with these ETF's, it would be more useful to recognize the benefits and shortcomings of these products and be able to exploit them appropriately. for example, as the LQD has traded at a premium it has been possible at times to write in-the-money call options against the underlying so that the option is struck against its NAV rather than the artificially inflated market price.<br><br>best wishes, and thank you again tom –
your coverage on this issue is great. the real issue at hear here is that an ETF can not adequately track illiquid high yield bonds. there are issues in the index that can not be readily traded with sufficient liquidity. as such, this makes the ETF on index' which contain illiquid securities somewhat flawed. however, don't misconstrue my opinion of ETF's or the potential utility of them on index' such as high yield bonds. LQD is another example of an ETF that has experienced its own problems this year as it has consistently traded at a premium over its NAV. while the Journal exposes a problem with these ETF's, it would be more useful to recognize the benefits and shortcomings of these products and be able to exploit them appropriately. for example, as the LQD has traded at a premium it has been possible at times to write in-the-money call options against the underlying so that the option is struck against its NAV rather than the artificially inflated market price.

best wishes, and thank you again

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