Mutual Fund

ETF Creation/Redemption Process: Behind the Scenes

The following was authored by Michael Barrer, Senior Associate of Capital Markets at WisdomTree. Exchange-traded funds (ETFs) can offer an attractive and efficient way for investors to gain access to all aspects of the marketplace and have greatly leveled the investment landscape in terms of availability to all asset classes and regions. As ETFs continue to grow in assets and scope of coverage, we are often asked these questions: What is an ETF creation or redemption? How does that work? What function does that provide, and does an investor make that decision? Let’s go behind the scenes of the life of

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NAV Doesn’t Mean Free: ETFs vs. Mutual Funds

The following was authored by Michael Barrer, Senior Associate of Capital Markets at WisdomTree. ETFs and mutual funds get compared constantly, and we have covered the topic numerous times in the past. Today we zoom in on one key difference between ETFs and mutual funds: how transactions are executed. Investors of mutual funds like the fact that the funds transact at net asset value (NAV), because they think they’re not paying the spread seen on-screen for ETFs. In fact, mutual funds, just like ETFs, are wrappers around baskets of securities. And just because a mutual fund transaction occurred at NAV, does not mean it

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ETFs: Benefits of Exchange Listing

The following was authored by Anita Rausch, Head of the Capital Markets team at WisdomTree. I have been talking to exchange-traded fund (ETF) investors for more than a decade, and when I mention the numerous benefits of the structure, I often hear “I don’t need intraday liquidity, so that does not benefit me.” Well, I am here to tell you that whether or not you utilize the intraday liquidity, it benefits all ETF investors. The exchange listing, or “ET” part of “ETF,” is what allows this product to have intraday liquidity. But the exchange listing also gives ETFs benefits over

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Stop The Blame Game: Index Providers Don’t Drive Performance

The following was authored by Martin Small, Head of U.S. iShares at BlackRock. Index providers may set out the rules, but stock pickers dictate winners and losers. Martin explains. We all have a fascination with finding the person “behind the curtain,” the Great Oz who exercises ultimate control.  In reality, wizards are few and far between.  With reams of data now demonstrating that exchange traded funds (ETFs) and index mutual funds don’t actually fuel the markets, pundits have started to look for a new magician, a single force that inflates asset bubbles and then catastrophically explodes them. Some have set their

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How To Prepare Your Portfolio For Any Weather

The following was authored by Matthew Tufano, economist within Vanguard’s Australian Investment Strategy Group. I love forecasts. If there’s something to predict, chances are I’m thinking about it. I first caught the “prediction bug” during winter storms, which brought the possibility of school snow days. If I believed it would snow enough to close school and I was right, I’d have an extra day to do my homework. The night before, I’d have to decide how confident I was in my call. Was I confident enough not to finish my assignments? The reward of being right (and the cost of being

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Guess Who’s Driving the ETF Bus?

The following was authored by Martin Small, Head of U.S. iShares and a regular contributor to The Blog. ETFs got their biggest boost in 2017 from end investors and advisors. Martin explains why this is such a big deal. By any measure, 2017 was a breakout year for exchange traded funds (ETFs). Globally, an unprecedented $630 billion flowed into ETFs, some three-quarters of which came from the U.S. As a result, close to $5 trillion is currently hard at work for ETF investors, helping them participate in the markets conveniently, precisely and generally at low costs. When you consider that these

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ETFs vs. Mutual Funds: The Age-Old Question

The following was authored by Paige Kyle, Capital Markets Associate at WisdomTree. One of the most common questions and discussion points we encounter is: “What are the key differences between exchange traded funds (ETFs)  and mutual funds?” Both are investment vehicles designed to give the investor exposure to a basket of securities, but there are important distinctions between the two structures in terms of transparency, trading and tax efficiency. Our CEO, Jonathan Steinberg, likes to use the analogy that mutual funds are like black-and-white TVs and ETFs are like HDTVs in full color. The first key difference between ETFs and mutual

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5 Questions To Ask Your Advisor About ETFs

The following was authored by Hollie Fagan, Head of BlackRock’s Registered Investment Advisor business. More and more investors are looking at ETFs and wondering if they should incorporate them in their portfolios. Talking to your financial advisors about ETFs is a good start. Exchange traded funds (ETFs) have joined mutual funds and individual stocks as mainstream investment tools, and their popularity is only growing. The past year saw record flows into stock and bond ETFs. Today, one in four U.S. investors owns ETFs, according to BlackRock’s ETF Pulse survey; half of all investors plan to purchase them in the next 12

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3 Ways To Help Maximize Your Portfolio’s Tax Readiness

The following was authored by Hollie Fagan, Head of BlackRock’s Registered Investment Advisor business. When it comes to taxes and investing, it’s all about the end game—the less you pay now, the more you’ll keep working toward your long-term goals. As the final months of 2017 gallop to a close (wasn’t it just Memorial Day?), many of us are thinking about taxes and looking for ways to reduce the bill from Uncle Sam. Your investment portfolio is an important part of that review. A recent BlackRock survey found that 44% of investors say taxes are the costs that matters most to

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3 Roles Bonds Can Play In A Portfolio

The following was authored by Matthew Tucker, Head of iShares Americas Fixed Income Strategy. As many investors know, bond investing is not easy. In a previous blog post I had briefly touched upon how to sidestep the most commonly made mistakes. Today I want to dig more into the first of the three mistakes—forgetting what your fixed income investment is for. Why do investors own bonds anyway? After all, we know bonds generally offer lower returns than stocks over time. Investors I talk to point to three things: 1. Diversify equity risk The logic behind diversification is that most investments don’t

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