From the category archives:

ETF Strategies

ETF Transparency: For Big Investors Only!

April 22, 2012

Exchange-traded funds might not be as transparent as you think. The industry of exchange-traded fund issuers has already come under fire from FINRA for disclosures on leveraged ETFs, but new complaints say the transparency rules favor larger investors over smaller, retail investors saving for goals like retirement. How Transparent are ETFs, Anyway? Exchange-traded funds are [...]

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What Makes an ETF Tax Efficient?

April 15, 2012

Exchange-traded fund investors know better than to ignore the cost of a particular investment in a portfolio. Most gravitate to ETFs for tax efficiency and low annual management fees relative to mutual funds. Let’s explore one natural benefit to the ETF structure that makes it tax efficient. ETF Structure Affect Tax Liabilities Exchange-traded funds are [...]

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Equal Weighted ETFs to Counteract the Apple Effect

April 9, 2012

Every alternative has its costs. Exchange-traded funds make investing less expensive, arguably less thoughtful, and certainly much less profitable for the investment management industry. From the perspective of an individual investor, these are all very good things. We often miss what the popularity of indexing tends to hide. Separating the Index from the Investment BusinessInsider [...]

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ETF Spotlight: PowerShares Buyback Achievers ETF (PKW)

March 18, 2012

Buybacks are back in play. Looking to boost shareholder value, a number of companies have announced share repurchase agreements to buy back shares on the open market. Betting on one’s own company is usually a safe bet for executives, one which increases the earnings per share for a firm, and allows for a very good [...]

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Tracking Error Explained

March 4, 2012

Tracking error happens when a fund’s performance deviates from the performance of an index it seeks to track. The SPY ETF is supposed to track the performance, before fees and expenses, of the S&P500 index. Should the fund perform above or below the performance of the S&P500 index, it would experience tracking error. It would [...]

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Shorting Treasury Options: Profit, Rinse, Repeat

December 6, 2011

Every few months, I’ve been repeating the same pattern of shorting out of the money leveraged ETFs on US Treasuries and keeping the premiums when the options expire.  It’s been a nice way to supplement largely flat market returns with recurring income, and in my view, without taking on an inordinate amount of risk.  Since [...]

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3 ETFs to Watch Following Shocking US Credit Downgrade

August 7, 2011

Unless you happen to be coming back from a weekend in the wilderness, Friday night S&P downgraded the US credit rating one notch (see list of AAA Countries remaining).  Obviously, markets will be quite volatile this week following this momentous news.  Over the weekend, the Saudi stock market had opened over 5% down.  As of [...]

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ETF Stripping Explained – Insider Trading Scheme

February 14, 2011

ETF Stripping is the latest financial innovation coming out of Wall Street – but not as a retail investor vehicle.  Evidently, insider trading schemes have continued to evolve in efforts to evade scrutiny to the latest point of absurdity.  In an ETF stripping scheme, when an investor, hedge fund or trader acquires insider information, in [...]

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7 ETFs That May Benefit from Election and QE2 Results

November 3, 2010

Now that the markets have largely digested the election results and the Fed’s FOMC meeting announcement, it was evident both outcomes were somewhat baked in as investors engaged in the typical front-running and anyone looking for a Black Swan Investment or binary trade on Wednesday was disappointed.   The Fed unveiled plans to purchase of an [...]

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