ETF 101

Exchange traded funds allow anyone to access broad markets cheaply and efficiently. However, to fully understand how ETFs effectively mimic a basket of securities, financial advisors and investors will need to take a look behind the curtain. ETFs trade under a so-called Indicative Value Paradigm (IVP), according to Kelly Haughton, Chief Executive Officer of the […]

I do the “ETF of the Week” for MarketWatch every week on Chuck Jaffe’s MoneyLife Show where I highlight big movers and disappointments among exchange traded funds. This week, I looked at the Market Vectors Gold Miners ETF (NYSEArca: GDX). The downtrodden gold miner sector finally shines. Click here to listen to the podcast. The opinions […]

Precious metals exchange traded funds have regained their footing and may continue to shine as favorable fundamentals help support the hard assets. For instance, on the recent webcast, Outlook 2016: Don’t Believe the Hype, James Butterfill, Executive Director and Head of Research & Investment Strategy at ETF Securities, argues that deflationary risks have been exaggerated […]

Graham Tuckwell, Founder and Chairman of ETF Securities, joined Tom Lydon, ETF Trends Publisher, at the Inside ETFs conference in Hollywood, Florida to discuss the innovations and growth in the Exchange Traded Fund business. As the industry matures, products are growing more sophisticated and ETF providers should be active in educating investors about the proper […]

As the Federal Reserve looks to interest rate normalization, some bond observers are worried about exchange traded fund liquidity risks in the event of a major sell-off. Consequently, the Securities and Exchange Commission has proposed a set of rules to help obviate the potential risks. The SEC is concerned that funds might be exposed to […]

I do the “ETF of the Week” for MarketWatch every week on Chuck Jaffe’s MoneyLife Show where I highlight big movers and disappointments among exchange traded funds. This week, I looked at the Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP). The Bank of Japan has revealed that it will use whatever monetary policy […]

Most actively managed open-end funds have underperformed their benchmarks over the long haul. Alternatively, investors may be better off in cheap passive, index-based exchange traded funds. “In the long run, active funds underperform their passive counterparts due to higher fees and trading costs,” Tim Strauts, Senior Markets Research Analyst at Morningstar, said. Over the one-, […]

Investors who still want their foot in the market but are wary of volatility weighing on their portfolios can turn to low-volatility exchange traded fund strategies that could generate more attractive risk-adjusted returns. For instance, investors can utilize something like the iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV), which selects stocks based on variances […]

As the Federal Reserve plans a “gradual” interest rate tightening cycle, exchange traded fund investors will have to adjust their portfolios accordingly. On the upcoming webcast, Positioning Portfolios in a Rising Rate Environment, Joe Benevento, CIO for Americans and Co-Head of Global Fixed Income at Deutsche Asset Management, Sebastien Galy, FX Strategist at Deutsche Bank, […]

Exchange traded fund investors may at some point come across exchange traded notes when filling out an investment portfolio. However, one should understand that ETNs are not ETFs, and the notes come with their own set of risks. Similar to index-based ETFs, ETNs also track some sort of index as part of their investment strategy. […]

As investors search for alternative avenues to track the U.S. equities market in an attempt to diminish risks and potential enhance returns, some may turn to fundamental or smart-beta index-based exchange traded funds. On the recent webcast, Fundamental Index: Inside 10 Years of Excess Return, John Feyerer, Director of Equity ETF Product Strategy at Invesco […]

The so-called FANG stocks – Facebook (NasdaqGS: FB), Amazon (NasdaqGS: AMZN), Netflix (NasdaqGS: NFLX) and Google or Alphabet (NasdaqGS: GOOG) – have been among the best performers this year. However, the outperformance may not last, and investors may turn to more equally weighted exchange traded funds to give the smaller guys a chance. In 2015, […]

With potential credit and rate risks weighing on the fixed-income markets, investors who are looking for higher yields may turn to an actively managed junk bond exchange traded fund that has outperformed more popular investment funds. The First Trust Tactical High Yield ETF (NYSEArca: HYLS), an actively managed ETF that tracks high-yield debt securities rated […]

The Goldman Sachs ActiveBeta Emerging Markets Equity ETF (NYSEarca: GEM), a relatively new player in the emerging markets exchange traded fund space, has quickly caught the eyes of institutional investors. GEM, which first began trading in September, has grown to $552.3 million in assets under management after attracting $375.6 million in net inflows this month, […]

Exchange traded fund providers have been slashing fees to dirt cheap levels. While cheap investments are an attractive draw, people should not solely invest in a fund based on low expense ratios. Last month, BlackRock’s iShares reduced the fees on a number of its products, with the Shares Core S&P Total US Stock Market ETF […]

With the Federal Reserve largely expected to announce the start of rate normalization next week, the higher interest rates could cause bond exchange traded funds to underperform in the short-term. When interest rates rise, the price of older bonds with lower rates fall. Since new bonds are issued at the newer and higher rates, investors […]

Money is an emotional topic, and many have allowed emotions to get the better of them when handling investments. To help keep one’s cool in any market condition, exchange traded fund investors should have a methodical strategy in place. According to the researchers from the Brazilian School of Public and Business Adminstration, the University of […]

After a multi-year bull run, U.S. equities are fairly valued if not overpriced and are beginning to slow. On the other hand, international stocks and exchange traded funds may offer better opportunities going forward. On the recent webcast, Sourcing Growth in a Growth-Starved World, Ted Lucas, Managing Partner and Investment Committee Chairman for Lattice Strategies, […]

As the markets brace for the Federal Reserve to begin hiking interest rates, bond exchange traded fund investors should thinking rate risk and ways to mitigate the negative effects higher rates. On the recent webcast, Fixed Income Strategies Ahead of the Fed, Scott Eldridge, Director of Fixed Income ETF Product Strategy at Invesco PowerShares Capital […]

Investors seeking greater income generation may turn to a number of alternative investments and exchange traded funds that can provide attractive yields. For instance, investors who want to add a little more dividend into their mix can consider master limited partnerships, or MLPs. To qualify as an MLP, the companies pass through at least 90% […]

As investors and advisors build a well diversified portfolio, one should also consider international stocks and exchange traded funds to potentially enhance returns. On the upcoming webcast, Sourcing Growth in a Growth-Starved World, Ted Lucas, Managing Partner and Investment Committee Chairman for Lattice Strategies, and Darek Wojnar, Managing Director and Investment Committee Member for Lattice […]

As many expected the Federal Reserve will only gradually raise interest rates, investors can still hold on to Treasuries for income exposure. However, people may want to consider Treasury inflation protected securities and related exchange traded funds in the event the unrealistically low inflation expectations prove to be wrong. “With the economy unable to break […]

With the Federal Reserve largely expected to begin hiking interest rates soon, fixed-income assets could weaken, but bond exchange traded fund investors still have some alternative options to help maintain yields and hedge against the rate risks. On the upcoming webcast, Fixed Income Strategies Ahead of the Fed, James Reiger, Global Head of Fixed Income […]

As exchange traded fund providers fuel an ongoing fee war in an attempt to one-up each other to attract assets, investors should look beyond expense ratios and consider other factors that make an ETF suitable for their investment horizon. Earlier this month, BlackRock (NYSE: BLK) trimmed the fees on seven of its iShares Core ETFs, […]

Investors can utilize a growing number of exchange traded funds that implement alternative indexing methodologies to diminish market risks and potential limit the impact of another bubble. James Norman, president of QS Investors, a Legg Mason affiliate, explains how market inefficiencies may lead to increased risk in the markets. “An example of market inefficiency is […]

Some investors may have noticed deviations in the way junk bond exchange traded funds track benchmark indices. However, the perceived discrepancies in their respective tracking performances may be a result of indexing quirks. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) and SPDR Barclays High Yield Bond ETF (NYSEArca: JNK) are the […]

Those who were a little off with their investment timing this year can still find a silver lining by utilizing a number of similar asset-class exchange traded funds to implement a tax loss harvesting strategy. For instance, the MSCI EAFE Index, which tracks developed Europe, Australasia and Far East, has declined over 5% in the […]

As investors try to diversify an investment portfolio, many have turned to smart-beta exchange traded funds that track alternative indices to potentially generate enhanced returns. “Many investors are moving away from traditional market-cap indices to smart beta in search of better returns and lower costs,” Alexander Channing, Director of Quantitative Cross Asset Index Strategies at […]

Exchange traded funds have been lauded for their efficiency and tax benefits but that there are still some exceptions to the rule. ETFs are typically seen as more tax efficient than mutual funds due to their structure. Mutual fund managers may buy or sell components to take a profit or meet redemptions from shareholders, which […]

The relatively nascent exchange traded fund industry is still evolving, with money managers and providers coming out with increasingly more sophisticated smart-beta, index-based strategies that could provide better risk-adjusted returns than traditional beta-index funds. On the upcoming webcast, The Evolution of Smart Beta 2.0, Alexander Channing, Director of Quantitative Cross Asset Index Strategies at ETF […]