ETF Insights

Getting Religious With ETFs
December 29th, 2009 by ETF Store Staff

As the appeal of ETFs continues to grow, so to does the innovation in and the types of ETFs offered to investors. In an attempt to differentiate themselves and gain appeal with religious-minded investors, ETF provider FaithShares recently launched a line of five ETFs which enable investors to invest with religious tendencies in mind.  All five of the funds […]

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The Benefits Of ETFs
December 23rd, 2009 by ETF Store Staff

One of the most favorable characteristics that ETFs have is their flexibility, or ability to be traded like stocks (Forget Stocks).  This characteristic is beneficial because it enables an investor to get continuous intraday pricing and the ability to buy or sell a basket of securities throughout the trading day.  This further translates to pricing […]

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ETN Market Gets A Boost
December 21st, 2009 by ETF Store Staff

Barclays Capital recently announced the launch of the first exchange traded note (ETN) that is traded in the Asian region (Other Ways To Play Asia).  This new ETN will be traded on the Singapore Exchange and will track the Dow Jones-UBS Commodity Index.  The ETN will enable investors to gain exposure to energy, industrial metals, precious metals, […]

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Be Aware Of ETF Tracking Errors
December 15th, 2009 by ETF Store Staff

Exchange traded funds (ETFs) have become a very popular investment tool (Benefits Of ETFs) as investors have realized their numerous potential benefits over other types of investment vehicles.  However, it is equally important to understand that sometimes they suffer from what are referred to as tracking errors. Tracking errors are the differences between the performance of […]

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Massman Selected as Panelist for Inside ETFs Conference
December 11th, 2009 by ETF Store Staff

Joe Massman, President & CEO of The ETF Store, has been selected as a panelist for the ETF 101 Workshop which kicks off the 3rd Annual Inside ETFs Conference on January 10, 2010, in Boca Raton, Florida.  The Inside ETFs Conference is the industry’s largest event and the first and only ETF conference designed specifically […]

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China Gets a New ETF
December 11th, 2009 by ETF Store Staff

As the popularity of emerging markets continues to grow (Emerging Market Choices), ETF provider Claymore Securities recently announced the launch of the newest member of its family, the Claymore China Technology ETF (CQQQ). CQQQ is unique in that it gives investors the ability to gain direct exposure to technology, a sector expected to grow at […]

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Direxion Expands Exposure to Emerging Markets
December 7th, 2009 by ETF Store Staff

At a time when emerging markets continue to draw assets and attention, Direxion Funds, an ETF provider known for its offering of leveraged and inverse products, announced the addition of four new ETFs providing investors with a way to implement similar strategies when investing in China and Latin America. The new ETFs are leveraged bull and bear indexes which seek to […]

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Playing A Falling Dollar With Other Currencies
December 3rd, 2009 by ETF Store Staff

As the U.S. dollar continues to show signs of weakness and the U.S. economy struggles to overcome the powerful forces of high unemployment, investors have been looking at ways to hedge their exposure to the dollar and the answer might lie in other currencies. Traditionally speaking, investors have shunned away from currencies due to their […]

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India and Its ETFs
November 30th, 2009 by ETF Store Staff

When investors want to diversify and gain international exposure, many turn to Asia and in particular, China. However, neighboring India may be just as attractive.  Some key items working in India’s favor include an expected growth rate of 6% for 2009 – driven primarily by public spending, an increase in auto and infrastructure demand, an increase in industrial production […]

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Fixed Income ETFs Are Red Hot
November 25th, 2009 by ETF Store Staff

Innovation continues to loom amongst fixed income exchange traded funds as ETF providers launch new products and attract assets.  The influx of assets into fixed income ETFs has been so great that a research report, conducted by Pali Research, indicates that assets in fixed income ETFs have jumped by 67% since the end of 2008 […]

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New Way To Play Gold
November 17th, 2009 by ETF Store Staff

As gold prices continue to rise on a weak dollar and fears of inflation, ETF provider Market Vectors introduced a new way to play the commodity. The new ETF, the Market Vectors Junior Gold Miners ETF (GDXJ), is constructed to track a basket of smaller gold mining companies.  The Market Vectors Junior Gold Miners Index, which […]

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What To Look For In Emerging Market ETFs
November 11th, 2009 by ETF Store Staff

As the ETF landscape continues to change and new product innovation remains robust, iShares is looking to further expand its offerings of emerging market ETFs. The leading ETF provider is expected to introduce two new ETFs:  the iShares MSCI Emerging Markets Financials Sector Index Fund and the iShares MSCI Emerging Markets Materials Sector Index Fund.  […]

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Most Popular ETFs in October
November 9th, 2009 by ETF Store Staff

In the month of October, it appears that investors became more bearish on U.S. equities and turned to other investments like international markets, fixed income and commodities for their portfolios. All together, net inflows for international equity long ETFs was $7.47 Billion for the month which accounted for more than half of the gross inflows for the […]

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ETFs Continue to Innovate
November 2nd, 2009 by ETF Store Staff

The month of October was a busy month for ETFs as numerous providers launched new ETFs or filed registration paperwork with the Securities and Exchange Commission to launch new ETFs. iShares filed a registration form to launch the first line of ETFs that hold municipal bonds which have maturities that fall within a specified date […]

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Forget Stocks?
October 30th, 2009 by Nathan Geraci

The front page headline on CNBC.com today reads “Forget Stocks: Investors Pile Into Exchange-Traded Funds”.  More and more investors are beginning to realize what we at The ETF Store have known for a long time:  ETFs can provide a more convenient, transparent, cost effective, and tax efficient way to invest across a wide range of […]

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VRDWhat?
October 28th, 2009 by Robert Dubois

Variable Rate Demand Obligations – that’s right, Variable Rate Demand Obligations, or “VRDOs”.  To most investors, the name is entirely “Greek” as is the nature of how the instruments work.  But VRDOs represent a holdings play generating a hugely important yield component in municipal money market funds as well as for many institutional cash managers.  […]

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3 Risks Of Bond ETFs
October 26th, 2009 by ETF Store Staff

Exchange traded funds are known for their ability to provide diversification, low cost alternatives, asset allocation and exposure to hard to reach markets and sectors.  From a portfolio management and asset class perspective, bond ETFs do such a thing, however, it is equally important to understanding the inherent risks involved with these versatile investment tools. […]

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Getting Granular in Fixed Income
October 21st, 2009 by Robert Dubois

Imperatives wrought by emerging deflation/inflation risks During the past year, much has been said and written about inflation risk.  And more recently, there has been increased chatter regarding deflation risk as well – with some analysts discussing the two as a sequential possibility, with deflation striking first. Nobody can say with certainty how the deflation/inflation […]

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Asia and its Vast Array of ETFs
October 19th, 2009 by ETF Store Staff

As the dollar continues to show signs of weakness and the U.S. is digging itself out of a recession, many have turned to Asia making the emerging continent a headline amongst many. Asia has drawn attention due to its large growth rates and its ability to emerge out of the global recession with a V-shaped […]

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The Ins and Outs of Hard Assets
October 14th, 2009 by ETF Store Staff

Hard assets have traditionally been a great way to diversify a portfolio and protect against inflation and overall market turmoil.  When considering hard assets, many think of precious metals such as gold and silver, however, there is a wide array of choices that can be easily accessed in a cost-efficient manner through exchange traded funds.  As an alternative to the more pure exposure provided through ownership of […]

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How To Play Real Estate with ETFs
October 12th, 2009 by ETF Store Staff

The real estate sector has been the bearer of good news lately, which has enabled it to gain some of the ground that it lost over the past two years.  In the month of August, residential construction rose by 4.7% to an annualized rate of $249.5 billion.  Although still down nearly 25% on a year-over-year […]

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New Commodity Equity ETF
October 9th, 2009 by Nathan Geraci

Jefferies, the publisher of the popular Reuters-Jefferies CRB Index, recently launched the Jefferies | TR/J CRB Global Commodity Equity Index Fund (CRBQ) which invests in the stocks of companies primarily involved in the production and distribution of commodities and related products and services. This new ETF will seek to track the performance of the Thomson […]

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Why Green ETFs May Be Worth A Look
October 6th, 2009 by ETF Store Staff

As the world begins to recover from a global recession, political attention is starting to shift to other areas.  One such area is clean energy, making green exchange traded funds an interesting place to look. One reason that green ETFs may be attractive in the near future is the portion of the U.S. energy policy which calls for […]

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How to Access Gold With ETFs and ETNs
October 5th, 2009 by ETF Store Staff

During periods of extreme inflation or deflation, gold has proven itself to be an investment alternative worth looking at and, recently, gold has started to outperform once again. Whether it be fear that the U.S. government is printing too many dollars or that investors just want to add protection to their portfolios, it is important […]

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New Mega-Cap ETFs
September 30th, 2009 by Nathan Geraci

Three new iShares “Mega-Cap” ETFs made their debut last Friday – the iShares Russell Top 200 Index Fund (IWL), the iShares Russell Top 200 Growth Fund (IWY), and the iShares Russell Top 200 Value Index Fund (IWX).  All three funds seek to provide equity exposure to the largest of the large cap companies. According to […]

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Threat of Regulations Doesn’t Keep Commodity ETFs Down
September 29th, 2009 by ETF Store Staff

In a time of uncertainty and hurdles for leveraged ETFs, the creator of the United States Oil Fund (USO) and the United States Natural Gas Fund (UNG), the United States Commodity Funds LLC, has launched the newest member of its family, the United States Short Oil Fund (DNO). This new fund is an inverse exchange traded fund […]

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You Can’t Handle the Truth
September 29th, 2009 by Robert Dubois

Bloomberg believes that the public can “handle the truth” regarding the Federal Reserve’s activities with banks. By Wednesday, we’ll arrive at another key juncture in the dispute pitting Bloomberg (and other media outlets) against the Federal Reserve (and a host of banks) over release of information detailing recipients, beneficiaries and parties to roughly $2 trillion in disbursements of […]

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How To Play the Dollar With ETFs
September 28th, 2009 by ETF Store Staff

Recently, the US dollar has drawn much attention as it has rebounded from a one-year low against the euro, its volatility has influenced commodity prices and a carry trade in the currency has emerged. The Federal Open Market Committee (FOMC) has acknowledged that the US economy is emerging from a prolonged recession, however, at the […]

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Deloitte Report on ETFs
September 24th, 2009 by Nathan Geraci

Deloitte LLP recently released an excellent report titled “Exchange-Traded Funds: Challenging the Dominance of Mutual Funds?”  For anyone interested in learning more about how ETFs work, how they compare to mutual funds, and why they’re exploding in popularity, this piece provides an easy to read, straightforward and independent overview. In answering the title question of […]

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China Still Rules Commodities
September 23rd, 2009 by ETF Store Staff

As some seemed to believe that commodity prices would fall due to a slowdown in China, it appears that they were wrong. China’s race for commodities and resources continues as the nation announced that China Investment Corp (CIC) will purchase $850 million worth of shares representing a 15% stake in commodities-focused and Hong Kong-based Noble Group.  What’s […]

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Converts on the Rise (convertible bonds, that is)
September 23rd, 2009 by Robert Dubois

Convertible bonds are an item that’s not usually at the top of investors’ list of hot-button items.  But in these times, it might not be a bad idea to give closer look to a player that can swing from both sides of the plate. Convertible bonds are fixed maturity debt instruments that typically pay a […]

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A Few Alternatives for Dealing with Inflation Risk
September 22nd, 2009 by ETF Store Staff

As global economies start to show signs of recovery, the US dollar remains relatively weak and our government continues to spend at record levels, inflationary worries have become the new talk of the town. Although price hikes have remained relatively low, stirring up an equally disturbing notion of deflation, eventually we will have to pay the […]

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3 ETFs And Sectors To Watch
September 19th, 2009 by ETF Store Staff

The Institute for Supply Chain Management recently reported that manufacturing crossed into expansion mode and the Federal Reserve Bank of Philadelphia stated that its general economic index measuring manufacturing rose more than 230% from the previous month to a reading of 14.1.  This is great news beacuse it indicates that businesses are opening their wallets and […]

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Innovation in ETFs waning? Far from it!
September 18th, 2009 by Robert Dubois

Some analysts and reporters question the need for additional ETFs and the value that new ETFs bring to investors. For what it’s worth, we heard the same commentary when the universe of ETFs listed on US exchanges stood at 200, 400 and 600 and still had gaping asset coverage holes. ETFs listed on US exchanges […]

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New Actively-Managed ETF
September 17th, 2009 by Nathan Geraci

AdvisorShares recently launched its first ETF product, the actively-managed DENT Tactical ETF (NYSE:  DENT).  This “ETF of ETFs” uses Harry Dent’s relative strength models to specify entries and exits.  Dent’s analysis is rooted in the Dent Method – an approach which uses changes in demographics to forecast future economic trends. AdvisorShares states that the fund seeks to […]

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UNG Announces It Will Issue New Shares
September 14th, 2009 by Joe Massman

As commodity ETFs have grown in popularity and have been heavily scrutinized by the Commodities Futures Trading Commission (CFTC), many commodity-tracking ETFs stopped issuing new shares in fear that position limits would soon be imposed.  One of the first to do so, despite having approval from the SEC to issue new shares, was the United States Natural Gas Fund […]

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Me and My Renminbi
September 12th, 2009 by Robert Dubois

One ingredient, one very, very big ingredient, has been lacking in the menu of emerging market currency plays: the dollar de-coupling of the only true 800 pound gorilla of emerging market central banks. At long last, though, that may be changing. The Financial Times reports that later this month China will, for the first time, […]

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ETFs Continue to Take Market Share
September 11th, 2009 by Nathan Geraci

The latest ICI fund data shows that ETFs continue to take market share from mutual funds.  As of the end of July, ETFs represented 8.6% of all non-money market funds.  In 2005, ETFs represented only 3.5%, notable because that’s the year non-money market mutual funds reached their peak in terms of total number of funds.  […]

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Where There’s Smoke, There’s Usually Fire
September 10th, 2009 by Robert Dubois

Most investors recall the pain they suffered during the most recent market meltdown as a pelting by multiple, highly correlated collapses in asset values packed into the fall of 2008. The reality, however, is that performance breakdowns got underway back in May of 2007 and cascaded over the next sixteen months across all non-treasury, non-agency […]

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Why Emerging Markets Are Attractive
September 8th, 2009 by Joe Massman

As the global economy starts to shows signs of improvement, many analysts think that emerging markets are attractive and for good reason. As these nations build infrastructure and their consumer spending increases, emerging economies often expand faster than their developed counterparts.  In 2008, the gross domestic product (GDP) of both China and Brazil grew more than 7% […]

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Protecting Recent Gains
September 5th, 2009 by Robert Dubois

Since the lows struck on March 9th by major US equities indexes, US equities have rallied 50%, international equities 70%, commodities 25% and US REITs 85%! Yet, if things have been so darned good, then why do most investors feel so badly and so beat up? The nature of compounding and recovery from negative returns […]

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Stop-Loss and Sell Stop-Limit Orders
September 3rd, 2009 by Nathan Geraci

As the investment community continues to trumpet the many potential advantages of exchange-traded funds – including lowers costs, tax efficiency, and transparency, one advantage that is often overlooked is the ability to place stop-loss or sell stop-limit orders on ETFs.  Because ETFs trade intra-day on the exchanges like stocks, investors can utilize tools that aren’t […]

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What is a Unit Investment Trust?
September 1st, 2009 by Joe Massman

The first exchange traded fund to come to market, and today the most actively traded ETF, the SPDR S&P 500 ETF (SPY), was structured as a unit investment trust (UIT).  In simple terms, a unit investment trust is an investment vehicle which purchases a fixed portfolio of securities, such as municipal or government bonds, mortgage-backed securities, common […]

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ETFs Continue to Remain Hot
August 27th, 2009 by Joe Massman

As the European exchange traded fund (ETF) market continues to glimmer, one of the world’s largest banking and financial services organizations, HSBC, has entered the arena with the introduction of a FTSE 100 Index Fund listed on the London Stock Exchange.  The HSBC FTSE 100 ETF (HUKX) is designed to track the performance of the […]

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An Uphill Battle for Commodity ETFs
August 24th, 2009 by Joe Massman

Over the past few weeks, things have become a bit difficult for commodity-focused exchange traded products (ETPs) as Barclays Capital announced that it is halting the issuance of new shares in the iPath Dow Jones-AIG Natural Gas ETN (GAZ). GAZ became the third commodity focused exchange traded product to stop issuing shares, joining the United […]

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ETFs Pressuring the Fund Industry
August 19th, 2009 by Joe Massman

The exchange traded fund (ETF) world has emerged with full force and continues to put pressure on the mutual fund industry. ETFs are so attractive because they have opened up a new panorama of investment opportunities for all types of investors.  They enable investors to grab broad exposure to stock markets of different countries, emerging […]

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Classifying ETFs
August 9th, 2009 by Robert Dubois

A key tenet of asset allocation is diversification across asset classes and subclasses having discernable differences in return and risk characteristics. Classification of equities according to style and sector characteristics (as well as capitalization and geographic coverage) enables index investors to “fence off” exposure and risk based on the composition of holdings. Style attribution classifies […]

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Is Your Advisor Using Leveraged and Inverse ETFs?
July 30th, 2009 by Nathan Geraci

Bob Pisani hit the nail on the head in an article posted on cnbc.com today regarding leveraged and inverse ETFs.  He states that “financial advisors are not adequately explaining to the public what these ETFs do – and don’t do”.  I’ll take it a step further – a number of financial advisors simply don’t understand […]

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More Advisors Moving to ETFs
July 24th, 2009 by Nathan Geraci

It appears that other advisors are starting to catch on to what The ETF Store has known for awhile – ETFs offer investors greater transparency and cheaper options than many mutual funds.  According to an article published in the Wall Street Journal today, a survey conducted by Cogent Research found that advisors expect to reduce […]

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Quick Snapshot: June ETF/ETN Data
July 16th, 2009 by Nathan Geraci

National Stock Exchange, Inc. recently released Exchange-Traded Fund (ETF) and Exchange-Traded Note (ETN) data for June.  Some highlights: Total ETF/ETN assets at the end of June were approximately $603.5 billion. The total number of ETF/ETN products increased to 837 from 804 a year ago. Net cash inflows to ETFs/ETNs in June totaled approximately $12.4 billion. […]

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Are You Invested Too Much In The US Market?
July 6th, 2009 by Joe Massman

Most individual investors have the overwhelming majority of their equity investments in the US stock market.  Investment professionals have historically encouraged this allocation under the slogan of ‘efficient frontier’, that a domestic overweight portfolio will reduce their risk and improve their returns over time.  The problem with that approach is that it ignores both recent and future economic trends.  In fact, […]

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New ETFs This Week
July 3rd, 2009 by Nathan Geraci

This past week saw a highly diverse group of new ETFs launch, a continuation of the rapid development in the space as investors demand access to previously unattainable asset classes, countries, niche markets, or investment strategies.  Investors have taken notice of the powerful ability of ETFs to gain exposure to new areas and ETF providers […]

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ICI Fund Flow Update
June 30th, 2009 by Robert Dubois

Recently the Investment Company Institute (www.ici.org) released May statistics on fund flows for mutual funds and exchange traded funds. Here’s what we gleaned from the May and prior months’ numbers: Assets held in mutual funds and ETFs have risen dramatically since the end of February, owing to a combination of appreciation in market value and […]

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Investing in China with ETFs
June 22nd, 2009 by Joe Massman

From 2003 through 2008, China’s annual GDP growth rate ranged from 9.1% to 12.1%, hitting $4.3 trillion in 2008. By 2020, the size of the Chinese economy is expected to be the second largest in the world behind the US. China’s economy has created a significant middle class and, as a result, a consumer economy […]

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Replace Your Tech Stock Fund
June 21st, 2009 by Joe Massman

When most people think of ETFs, they usually think of broadly diversified index ETFs.  That’s what we generally use at The ETF Store.  Most investors will do well by using those ETFs to build a well diversified portfolio that includes investments in a wide range of asset classes. I recognize that isn’t good enough for a […]

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Pimco’s Arrival: What it Really Means
June 13th, 2009 by Robert Dubois

Pimco’s first index-based ETF, the Pimco 1-3 Year Treasury Index Fund (TUZ), started trading last week. The ETF is based on the Merrill Lynch 1-3 Year U.S. Treasury Index. Ever since Pimco made known last summer its intention to enter the ETF space many in the media have proclaimed Pimco’s entry a watershed event. So, […]

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Innovation on the Sector Front: Emerging Markets
June 10th, 2009 by Robert Dubois

Some investors allocate capital entirely along sector lines. Others use style and capitalization to specify asset allocations. Still others use a combination of the two, employing sector ETFs to overweight holdings within one or more sectors. Prior to May 21 the universe of sector index ETF families numbered five covering U.S. equities, two covering international […]

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Pimco Joins the Party
June 5th, 2009 by Nathan Geraci

Pacific Investment Management Company, better known as Pimco, made headlines this week with the launch of its first exchange-traded fund – the Pimco 1-3 Year U.S. Treasury Index Fund (TUZ).  TUZ tracks the Merrill Lynch short-term U.S. Treasury index and immediately becomes the cheapest fixed income ETF on the market with a paltry 0.09% expense ratio.  […]

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A Primer on Energy ETFs
May 25th, 2009 by Robert Dubois

This week we’ve fielded calls requesting information and guidance regarding ETF coverage of energy commodities. And while the entire commodity arena warrants attention, for the sake of brevity, we’ll limit our discussion here primarily to the energy segment. Most any form of commodity exposure that the individual and institutional investor would need is currently available […]

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Another Fan of Commodities
May 18th, 2009 by Joe Massman

In the May 18, 2009 edition of Barron’s, there is an article from the authors of the book Globality: Competing with Everyone from Everywhere for Everything, that presents a concise explanation of why every long-term investor should have exposure to commodities in their portfolio. While we are mired in an economic slump unlike anything since […]

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ishares Putting Money in Your Pocket
May 14th, 2009 by Joe Massman

The announcement hasn’t received a lot of attention, but if you participate in a 401k plan, there was a recent news release from ishares that might help put money in your pocket. To date, the penetration of ETF’s into corporate 401k accounts has been minimal at best.  ETFs offer 401k participants dramatically lower investment costs […]

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ETFs Eating Fidelity’s Lunch
May 13th, 2009 by Nathan Geraci

“ETFs are beginning to eat everyone’s lunch in this industry.” The above quote refers to the mutual fund industry and comes from none other than Jim Lowell, the editor of the Fidelity Investor newsletter.  A recent Bloomberg article highlighted a number of reasons for deteriorating asset levels at Fidelity, the largest mutual fund company in […]

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Separating the Cart (instrument) from the Horse (strategy): The Real Beauty of ETFs
May 10th, 2009 by Robert Dubois

The educational starting point for all investors new to ETFs, be they novice or experienced professional, ought to be Investment Cart & Horse 101.  ETFs enable investors to clearly and objectively distinguish, both in investment thinking and in investment practice, between the proverbial “cart” and “horse“, i.e., the investment instrument and investment strategy. The gross […]

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Missing the Target
May 3rd, 2009 by Nathan Geraci

Over the past several years, target-date (or life-cycle) mutual funds have gained popularity as fund companies tout them as an easy way for investors to obtain an appropriate asset mix in their portfolio for a particular age or investment timeframe.  Theoretically, these funds are designed to allow an investor to select a date that approximately […]

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SmartMoney: ETFs “pushing mutual funds out of the picture”
April 22nd, 2009 by Joe Massman

There is a great article posted today at smartmoney.com about the gains ETFs are making against mutual funds.  The article describes the rapid growth of ETFs, the fact that some fund companies such as Vanguard are issuing their own ETFs in order to survive, and the benefits to an investor of owning ETFs instead of […]

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Mutual Fund Company Magic
April 21st, 2009 by Joe Massman

When a broker tries to sell you a mutual fund, or your advisor touts the performance of a fund he or she wants to put your money into, it is modus operandi to show how wonderful the fund has performed against its benchmark, or relative to its peers.   Before you jump into the fund, consider the impact […]

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Mutual Funds Walking, Not Running, Toward ETFs
April 20th, 2009 by Robert Dubois

Yes, with great anticipation and fanfare both Pimco and Schwab have proclaimed their intention to enter the ETF space. And both will likely bring with them actively managed strategies. But, given the staggering capital flows out of traditional, actively managed mutual funds and correspondingly massive flows to index-based ETFs, where’s the stampede of active mutual […]

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Introducing….Housing ETFs
April 18th, 2009 by Nathan Geraci

The much anticipated and long-awaited MacroShares ETFs tracking the S&P Case Shiller Composite-10 Home Price Index will make their debut on April 28th.  The bullish MacroShares Major Metro Housing Up (UMM) ETF will seek to deliver three times the cumulative percentage change in the benchmark index while the bearish MacroShares Major Metro Housing Down (DMM) […]

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Find us in Barron’s
April 16th, 2009 by Robert Dubois

In this week’s edition of Barron’s, our President and CEO Joe Massman is quoted in an article about the impact of exchange traded funds on the mutual fund industry.  Joe discusses the momentum that is growing in fund flows away from mutual funds and the hope he has for innovation in the industry in the future.  […]

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See you at the Fed!
April 13th, 2009 by Joe Massman

The 2nd annual ‘Money Smart Week of Greater Kansas City’ campaign kicks off on Monday, April 20th and runs through Saturday, April 26th.  The campaign is a coordinated effort by local financial institutions, non-profit organizations, schools, libraries, and government agencies to advance financial education through public awareness and sponsorship of a week-long series of over […]

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Top Ten Reasons To Run From Your Mutual Fund Advisor
April 4th, 2009 by Joe Massman

If your advisor is still using actively managed funds, here are the top ten reasons why you should take your money and run…   10. You’re losing money from high fees – lots of money over time.  9.   You are paying a lot more in taxes than you should. 8.   You can’t buy or sell […]

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Money Market Fund Dirty Laundry
April 4th, 2009 by Robert Dubois

At the end of February, assets in money market mutual funds stood at $3.9 trillion, a staggering 53% increase from a precrisis level of $2.5 trillion in June 2007. The stampede to cash triggered by the carnage of the financial crisis has clearly left money market mutual funds playing a greater role in investor portfolios. But […]

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College Kids Who Love ETFs
April 2nd, 2009 by Joe Massman

These college kids do a great job of explaining ETFs and why new investors should use them instead of mutual funds….

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Prognosis: Fund Industry in Critical Condition
April 1st, 2009 by Joe Massman

The following article was posted at Indexuniverse.com yesterday by Robert Dubois, our Senior Vice-President of Investments…. In 2008, investors yanked $235 billion from non-money market mutual funds while adding $175 billion to exchange-traded funds. Market share of ETFs compared to non-money market mutual funds has doubled roughly every three years and now, it would appear, […]

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Join us at the library
March 27th, 2009 by Joe Massman

Next week, in conjunction with the Missouri Council on Economic Education, we will be putting on a free investment seminar at the Plaza branch of the Kansas City Public Library.  The seminar starts at 7:00 pm and should run till about 8:00 or 8:30. The seminar will include an overview of current economic developments and […]

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Economic (March) Madness
March 25th, 2009 by Nathan Geraci

In the spirit of March Madness, The Motley Fool decided to have some fun creating a “Blame Bracket” to determine who is most responsible for the economic madness we’ve all been experiencing over the past year.  While the “committee” did an admirable job selecting the field, there were surely a few disappointed “teams” left out […]

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ETF Dividends
March 24th, 2009 by Joe Massman

There is a brief story yesterday in the USA today explaining how ETF dividends work.  In addition to trading on exchanges like stocks, ETFs also share other features.  The process for paying dividends is just like stocks: there is a date of record (the date in which the owners of the shares who will receive the dividend […]

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An Inconvenient Debt
March 23rd, 2009 by Joe Massman

A day after I suggested ignoring all the talking heads on TV and just watching M2, I came across this hilarious youtube clip.  I’ll admit I had never even heard of Glenn Beck before, but he’s explaining in a more creative way what is going on with M2.

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Ignore TV, Watch M2
March 22nd, 2009 by Joe Massman

The media is full of noise from talking heads debating the merits of TARP, bank bailouts, gov’t debt buybacks, foreclosure prevention, stimulus checks, Wall Street bonus babies, etc.  It’s impossible to turn on the television and not find someone who is an expert on what the Treasury and Fed should be doing. I don’t think anyone […]

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TIPS: An Important Inflation Hedge
March 21st, 2009 by Robert Dubois

With massive stimulus programs currently getting geared up, along with related record-ripping government borrowing, does an average inflation rate of just one percent over the next ten years sound plausible? Maybe not, but that’s precisely what the current yield spread between ten-year Treasuries (2.93%) and ten-year Treasury Inflation Protected Securities (TIPS) (1.87%) would imply. While […]

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Asset Concentration Risk and Strategy Discipline
March 16th, 2009 by Joe Massman

ETFs are lower cost and more tax efficient than mutual funds.  That is a given.  You shouldn’t invest in something because it’s inexpensive, though.  Beyond costs, a crucial element of any investment strategy should be the management of (1) asset concentration risk and (2) strategy discipline.  ETFs are ideal for both, and here’s why. Transparency … […]

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Fund Fee Update
March 14th, 2009 by Joe Massman

I came across some updated mutual fund and ETF fee information from Morgan Stanley, so I thought I would update those here.  To complete the picture, I’ve included fixed income data from Barclays. As you can see, for every major asset class, average internal fund management fees for ETFs are significantly lower than is the […]

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If CEO’s Don’t Know, How Can We?
March 11th, 2009 by ETF Store Staff

None of us has ever seen a time when so many companies are going out of business, needing to be consolidated, or teetering on the brink of bankruptcy.   The management of these companies never seem to see it coming.  It’s like some fantastic surprise that the economic or business outlook changed and they didn’t think […]

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Industry at a ‘Tipping Point’
March 6th, 2009 by Joe Massman

I mentioned last week that the entry of Schwab into the ETF business marked a pretty important day for the industry.  Today Marketwatch.com posted a story on their site about the same topic, but made a bold statement.  According to Marketwatch, Schwab’s entry, along with Pimco’s announcement last year that it was getting into the […]

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Wall Street Journal: Diversify with ETFs
March 3rd, 2009 by Joe Massman

In Monday’s Wall Street Journal, there is a great article about how investors can use ETFs outside of their 401k plans to improve their portfolio.  Most 401k plans are full of mutual funds that give exposure to stocks and bonds, but few give you access to alternative assets.  These assets, such as gold and other […]

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Schwab Gets In The Game
February 26th, 2009 by Joe Massman

As we’ve mentioned before on this blog, many mutual fund industry analysts have been predicting gloom and doom for mutual fund companies over the next few years.  The market drops have been killing their asset levels, and the move of market share into ETFs is only exacerbating the problem.  The industry has been laying off […]

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Buy The One-Star Funds?!
February 22nd, 2009 by Nathan Geraci

The New York Times recently ran an article interestingly titled “A Quarter When Mutual Fund Rankings Didn’t Matter” referring to the fact that highly rated mutual funds failed to weather the stock market’s dramatic decline in the 4th quarter of 2008 any better than a portfolio simply representing the market as a whole.  A portfolio […]

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Beyond Steak and Potatoes (Stocks & Bonds)
February 18th, 2009 by Robert Dubois

Some things really do “never” change.  Take, for example, the drumbeat we hear, every time there’s a meaningful downturn in equity markets, of those good ol’, familiar, “tried and true”, “Stocks & Bonds Allocation ABCs” vibes from a seemingly endless parade of would-be allocation medics. But what have we learned over the last forty years […]

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Spiders and Diamonds and Qubes, Oh My…
February 13th, 2009 by ETF Store Staff

Come on, admit it. We’ve all opened a quarterly financial report sometime in our investment lives, winced at the numbers, and asked one simple, elegant question -why can’t I just put my money into something that will match the market? Exchange traded funds, or ETFs in market shorthand, are a relatively new group of financial […]

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Smart Money?
February 9th, 2009 by Nathan Geraci

SmartMoney magazine recently released its list of the 100 “best time-tested” mutual funds.  But as an article from the Motley Fool illustrates, this list looks anything but smart and could cost you money.  43% of the mutual funds recommended on this list have front-end sales loads averaging a lofty 5.4% of assets.  In other words, […]

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Wall Street Journal: Use of Bond ETFs Growing
February 2nd, 2009 by Joe Massman

Most people who are familiar with ETFs see them as a better way to create well diversified equity portfolios and give them access to alternative assets like commodities or real estate.  They typically don’t consider fixed income ETFs as essential building blocks of a portfolio.  That perception is changing, though.  As the Wall Street Journal […]

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Why Mutual Fund Companies are Stuck
January 30th, 2009 by Robert Dubois

The whole of the mutual fund distribution space is “stuck,”  if for no other reason than none of its primary practitioners can bring themselves to categorically call a spade a spade. What and where’s the spade? Actively managed mutual funds are the spade. The mutual fund food chain- from fund sponsors to wire house brokerages […]

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How Much Can An ETF Save You?
January 27th, 2009 by Joe Massman

Sometimes investors ignore or don’t notice the impact of broker commissions and high fees on their investments. Now, there is an easy to use tool available at the Financial Industry Regulatory Authority, or FINRA website. FINRA is essentially the regulator of securities brokers and other investment firms and the website makes it easy to see […]

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Jane Bryant Quinn: ETFs “Going In For the Kill”
January 17th, 2009 by Joe Massman

Since actively managed mutual funds keep cash on hand to be able to meet daily customer redemptions, conventional wisdom holds that mutual funds should outperform index funds and ETFs in down markets because the cash acts as a cushion when there is a falling market. That didn’t happen last year.  As Jane Bryant Quinn of […]

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Understanding Indexes
January 15th, 2009 by Joe Massman

Nearly all ETFs track an index (the exceptions are a small number of actively managed ETFs). Where they differ, however, is what indexes they track and how they go about their tracking.  Understanding these differences is important to make sure you choose the right ETFs for your portfolio.  This is especially true as the number […]

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Mutual Fund Company Gone Bad
January 12th, 2009 by Joe Massman

Another relevant illustration:

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Financial Advisor Gone Bad
January 11th, 2009 by Joe Massman

Going through the summary of mutual fund fees reminded me of this cartoon I found a few months ago:

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A Glossary of Mutual Fund Expenses and Fees
January 9th, 2009 by Joe Massman

It is difficult for average mutual fund investors to understand what they are paying for their investments – especially if they use a broker and the broker is paid through commissions. There are so many share classes, front-end fees, back-end fees, redemption fees, etc. that it is no wonder people are confused. It’s amazing how many people I know have no idea what they are paying.

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A Better Mousetrap for Fixed Income
January 4th, 2009 by Robert Dubois

Most investors and advisors who have come to use and appreciate ETFs would agree that the case for ETFs relative to actively-managed mutual funds in the equity arena is firmly established, crystal-clear and completely unambiguous.  But what about in the fixed income domain? Relative to their equity counterparts, can fixed income ETFs boast of advantages […]

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American Funds Raising Fees
January 2nd, 2009 by Joe Massman

I referenced an article last month from the Motley Fool [link to post] that discussed the possibility that mutual fund fees would go up in 2009.  Despite the market meltdown of 2008 and the exodus of assets out of equity funds, American Funds has made the somewhat predictable decision that they need to raise their […]

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