March 2007

Weekend Reading 3/23/07

The Little Black Book of Investing: Put Your Money Into Index Funds
Of the 1400 mutual funds out there, in the last 40 years, only one has beaten the market for 15 consecutive years (and that streak just ended in 2006) Legg

Mutual Funds May Sidestep Some Fallout
But many mutual funds might have shied from investing in the lenders because small market capitalizations can make it difficult for a mutual fund to park a

Don't fear exchange-traded funds as they can lower your annual commission costs
I know lots of readers are comfortable and familiar with mutual funds, but uneasy about ETFs -- particularly since you have to pay a commission to buy them.

More on the Claymore Sabrient Defender ETF
I am actually intrigued by the potential of this ETF, which tracks a basket of stocks that held up well on down days during the previous quarter.

New Mortgage-Backed Securities ETF Introduced
Greg Newton submits: Cleantech's been a bit of a phenomenon in ETF-Land over recent months, so it's nice to see that BGI Friday launched the world's first

ETF Leaders and Laggards
Exchange-traded funds sprinted out of the gate in 2007 in what looked like a market that would produce a repeat of last year's winners and losers.

Bad mortgages may hit mutual funds
[Mutual] funds holding large securities in this market will suffer a hit, said Joseph Rooney, deputy commissioner for financial regulation for the

Mutual-fund and ETF performance, analysis and more
as part of a special focus on ETFs, and columnist Paul Farrell tells you how to make real money, all on MarketWatch's Mutual Funds/ETF page this week.

Mortgage-backed ETF begins trading on Amex
iShares has now brought this same level of transparency to the US mortgage market," said Lee Kranefuss, CEO of BGI's Intermediary and Exchange Traded Funds

Using leveraged mutual-funds to beat the S&P 500
The Standard & Poor's 500 Index is now almost 5% cheaper than it was a month ago.

Mutual Funds: Stock index lags in '00s performance race
At the biggest of all index funds, the $119 billion Vanguard 500 Index Fund, the per-year payoff has been 0.9 percent. OK, it's unfair to the stock market

Housing Bust Taking Its Toll On Homebuilders ETF
Tom Lydon (ETF Trends) submits: Expect a downward trend for homebuilder ETFs. According to DR Horton (DHI) President Donald Tomnitz, the homebuilding market

U.S. mutual funds exposed to mortgage turmoil
Mutual funds held mortgage-related debt securities issued by the subprime lenders New Century Financial, NovaStar Financial and others at the end

Putting Faith in Religious Mutual Funds
Socially responsible investing has become increasingly popular in recent years, with lots of mutual funds available for investors who want to keep their

Mutual Funds Inch Toward More Conscientious Proxy Voting on Social and Environmental Resolutions
Optimists predicted that the SEC rule requiring mutual funds to disclose their proxy voting records starting in August 2004 would deter funds from

New Rule Boosts Nondeductible IRAs
With April 17 the last date for contributing to an IRA for 2006 fast approaching, you may want to review some key aspects of these

Indexing and ETF Space Headed Onward and Upward
Total worldwide exchange-traded funds also saw significant growth. Total ETFs reached $451 billion as of Dec. 31, an 18.8% increase from $379.7 billion as

Constructing a Portfolio the ETF Way
Quite simply, for each part of a portfolio, an ETF can be the best tool or the worst, depending on the individual and what he is trying to accomplish.

Ameritrade To Offer 'Lifecycle' ETF
The ETF will be a "life cycle" ETF with a target date for the investor, who will choose a year close to when he plans to retire.

Janus Enterprise Seeks Steady Growth
Jonathan Coleman, who manages the $1.8 billion fund, says he wants growth without the volatility that can go with high-risk stocks.

First mortgage-backed securities ETF debuts despite subprime mess
Although mutual funds that invest in mortgage-backed securities have been around for a while, the first ETF hits the market as economists try to get a

ETF-Based 401(k)s Reduce Excessive Fees
A popular option has been to switch from mutual funds to less expensive ETFs. Meanwhile, some employers have been hiring consultants to decipher plan fees

S&P Completes Sale of Mutual Fund Data Business to Morningstar
Standard and Poor's mutual fund data business includes performance, rankings and holdings data on more than 135000 funds in over 30 countries. It also includes desktop applications and data feed products. As part of the transaction,

Stockpickr! Forbes: 10 New Niche ETFs (Special Situations) Portfolio
Here are 10 ETFs that offer opportunities to invest in unique strategies.

Morningstar's International Comeback Kids
Morningstar's Fund Spy lists three quality international funds that had a tough 2006 but that their analysts think will perform well going forward:. Today, we'll take a closer look at three such laggards that we think continue to be

Surrounded by Bad Investing Advice
CBS Marketwatch published a horrible article today on using leveraged ETFs to beat the S&P 500. In the article, author Bill Donahue discusses a couple of ideas that he thinks are slam-dunks and no more risky than just investing in the

An independent chairman for mutual funds?
As the SEC winds up its debate about whether to impose new regulations requiring independent directors for mutual funds, questions remain. In 2004, the Commission passed a rule requiring an independent chairman and a board that

Points To Ponder
Tax-savvy ETFs. For yen ETF, timing is everything. The argument for keeping it simple continues to resonate. What if the stock market was a bond? I would resist the urge to place too much importance on how any mutual fund has performed

SRI Mutual Funds: Robin Hood or Robber Baron?
My Competition A couple weeks ago I got into a discussion with Marc Gunther about socially responsible mutual funds and how I feel that they charge too much for the services they provide. This is of course rather self-serving,

Spinoff ETF: Obvious Benefit To Investors
We applaud IBD for choosing our index as its featured ETF product. We think this reflects our belief that there are better ways to invest through indexes.

Don't Buy Top Ranked Funds
Given the scads of mutual funds out there, investors might be tempted to turn to the want ads rather than sort through heaps of funds in hopes of finding a good match. More often, befuddled investors depend on fund rankings to bring a

Weekend Reading: Mutual Funds, ETFs, Index Funds 3/16/07

New Insights into Mutual Funds
'New Insights into Mutual Funds' is a bundle of four empirical studies on mutual funds. In his thesis, Joop Huij investigates persistence in risk-adjusted

Mutual funds, like a good team on court, must rebound well
In mutual funds, there are asset classes. Your search for a fund should start by deciding the type of assets you want to own. If you want a large-cap growth

Is Inverse ETF Activity a Contrarian Indicator?
Scott Rothbort submits: One sign that the market had gone too far was when the volume of chatter about inverse and leveraged inverse ETFs went up

Russian ETF Takes a Beating
Tom Lydon (ETF Trends) submits: Emerging markets ETFs had a rough week, but Russia seemed to be one of the hardest hit. The Russian RTS index ended down

Some Mutual Funds Are Worth Price of Sales Load
WE HERE AT THE SmartMoney fund screen are obsessed with cutting out fees. We don't need stacks of academic studies

Vanguard unveils mutual funds with ETF shares
There will be a 0.25% purchase fee on investments in the Investor and Institutional Shares and a 2% redemption fee applied to non-ETF shares redeemed within

Mutual Funds
Simple: Mutual Funds. People can buy stocks which are the average price of up to 10 players across sports. That way they're low risk stocks which can have

Investors want to consider index funds along with traditional mutual funds for their portfolios
However, like a stock you will pay a commission when you sell the ETF. Taylor says an important item to consider when weighing mutual funds and index funds

The Best of the Bond Mutual Funds - AAA Credit Quality Only Portfolio
Here are some of the best bond mutual funds in the business, all of which have a minimum initial investment of $3000 or less, and all of whom only invest in AAA-rated fixed income products. Criteria: - Portfolio manager has been there

Fixed-Income Bond ETFs Poised For Breakout
After trending modestly lower throughout the morning, stocks reversed into positive territory in the afternoon, but a sell-off during the final hour

How to use Yahoo finance to research mutual funds
Mutual funds are considered the best and safest investments by some financial experts. When it comes to investing in mutual funds, research is a vital part of successful investing. While every mutual fund has a manager who controls and

ETF industry sees birth of more rating services
The number of companies that rate exchange traded funds and the methods they use to rate them is growing.

Funds Maverick Talks 'Common Sense'
Do you think the growing popularity of exchange-traded funds presents risks to investors? Of course it does. ETF is a term that covers a multitude of

ETF Evolution Conference: A Look Behind the Indexes
Andrew Corn submits: I was invited to moderate the panel for the session: "Index Construction and How It Relates To "Real World" ETF Products."

WisdomTree: Betting On Single Factor ETF Indexes
Tom Lydon (ETF Trends) submits: WisdomTree is betting that when it comes to fundamental indexing for ETFs, the simpler, the better.

Plenty of free sites popping up to help investors pick an ETF
In April, XTF plans to come out with mutual-funds built around ETFs. The firm's ETF ratings site is constructed for professional as well as amateur

XShares expands HealthShares ETF group
XShares Advisors LLC launched nine exchange-traded funds on the New York Stock Exchange on Monday, expanding its HealthShares

Managers At AIM Set High Standards
When deciding whether to invest in a company, Rasplicka and his team of five analysts look for mid-cap stocks with earnings momentum.

Weekend Reading: Mutual Funds, ETFs, Index Funds

New ETF focuses on technical factors driving markets By some estimates, a quarter of all exchange-traded funds on the market are trying to generate market-beating returns even

Timing is Everything: PowerShares Launches 'Relative Strength' ETF That's a tough situation for any ETF launch: investors aren't looking to put new money to work when the market's crashing. But it's particularly tough for a

ETF Assets rise by $8.45 billion During January, the value of all ETF shares issued exceeded that of shares redeemed by $2.99 billion. ETFs are an emerging class of index funds that trade

Investors flee equity mutual funds Separately, TrimTabs said investors withdrew a full $4.21 billion from exchange-traded funds that invest in US stocks in the last week.

No Siesta for This ETF The Mexican economy is gaining momentum, having grown 4.5% in 2006. Internationally minded investors looking to spice up their

New Relative Strength ETF Strength The PowerShares DWA Technical Leaders Portfolio (PDP) exchange traded fund (ETF) began trading on March 1st. This ETF tracks the performance of 100 US-listed securities and is the first based on technical analysis in the

Why I Like Index Funds, Part 3 Why It Matters Which Index Fund You Own and How You Buy It. Minimize Taxes to Maximize Your Investment Return. Costs Matter If You Want to Maximize Investment Returns. How High Mutual Fund Fees Can Cost You Millions

Best & Worst Healthcare and Biotech Mutual Funds In the Thursday issue of the Wall Street Journal, the regular feature Mutual Fund Scorecard showcased the very best and worst performing healthcare and biotechnology mutual funds. The following is a summary. The 3 and 5 year returns are

Exchange Traded Funds vs Mutual Funds Making the best investment decision requires that you know what are the best products available in the market. While the choice of a particular investment product changes according to your particular situation, it helps to know the pros

The Warren Buffett Mutual Fund Can't afford Berkshire? You have alternatives.

Green index funds fight smog, global warming The launch of the ETF is logical, because the sector has enough companies to sustain an index, said John L. Jacobs, chief executive of Nasdaq Global Funds

How 'Diamonds' ETF navigated Dow's steep decline Unlike closed-end mutual funds, ETFs have an "arbitrage mechanism" that allows large institutions to make money if the share price comes unhinged from the

3 Tips for Mutual Fund Millions Fund investors can get rich, too.

The lemmings are running! Investors flee mutual funds I believe that investors should take a long look at exchange-traded funds for this, among other reasons. ETFs are often lower cost, easier to trade, and ideal for making macroeconomic bets. To learn more about ETFs, visit etfconnect.com

Mutual Funds: What Investors Need to Know About Morningstar Mutual Fund Fiduciary Grades Morningstar now provides Fiduciary Grades on mutual funds. How does Morningstar determine these grades? How can mutual fund investors use these grades to better manage their portfolios?... Channel: Money Tags: Mutual fund investment

Analysis: How to fight the frenzy of exchange-traded funds The market for exchange-traded funds looks suspiciously like the "let's take it public" days of the dot-com mania at the end of the 1990s.

DFA's Davis: Why Most Mutual Funds Lag In short, the vast majority of mutual funds lag the market. They do this not because their managers are stupid but because beating the market is hard.

Vanguard's ETF And Advisory Businesses Surging Tom Lydon (ETF Trends) submits: Vanguard's financial advisory and ETF businesses have been growing, reflecting the company's fresh approach away from its

Bear-market funds' time has come ProFunds alone has $4.1 billion in its bear-market mutual funds and exchange-traded funds, $2.6 billion of which has arrived into its new leveraged and

When markets head south, don't hit panic button Those investors will be rewarded when they deposit money into their accounts when mutual funds and stocks have shrunk a dress size or two.

Don't Sweat ETF Fees As far as mutual funds are concerned, that's probably true, since few active managers are able to consistently outperform their benchmarks anyway.

Understanding M*’s Mutual Fund Risk Measures: Alpha, Beta, and R-squared Morningstar is the my primary website for mutual fund research. When I look for a mutual fund investment (mostly actively managed funds), not only I am concerned with a fund's past performance and costs, but its risk factors as well.

Vanguard readies new international fund, ETF Investor shares will have an estimated expense ratio of 0.4%, while the ETF share class to trade on the American Stock Exchange will have fees of 0.25%,

Mutual Funds for Kids The fund invests half of its assets in exchange-traded funds that track the S&P 500. They use ETFs, says Robert Bacarella, founder, presiden

Model ETF Portfolio Our theoretical $10000 portfolio of 10 exchange-traded funds illustrates this. In the period from Feb. 6 through Feb. 28, the portfolio lost 2.65%,

ETF Volume vs Russell 3,000 Volume Bloomberg lists a total of 457 US traded ETFs. We gathered the daily combined volume of all of these and compared it to the daily volume of the Russell 3000 (which represents 98% of the investable US equity market).

Weekend Reading: Mutual Funds, ETFs, Index Funds

Commentary: Decisive strategy for an imploding global ETF market - MarketWatch
As such, Foreign exchange-traded funds are under significant pressure and may warrant a decisive global correction strategy to protect your portfolio.

St. Paul Pioneer Press | 02/28/2007 | ETF frenzy echoes era of dot-coms
And, unlike most no-load mutual funds, exchange-traded funds generate a broker commission each time you buy and sell. That means the more you trade,

Resource Investor - Blog - StreetTRACKS gold ETF hits $10 billion
As of February 20, 2007, assets under management in the fund totaled approximately $10.2 billion, making it the seventh largest ETF by assets in the US and

China pullback underscores risk of emerging markets ETFs - MarketWatch
Lydon said he'd been recommending a position in the PowerShares ETF tracking China, but sold it when the market pulled back in January on bubble fears.

Index funds help you avoid risks of stock selection, market timing - The Boston Globe
Q Like you, I believe investing in index funds is a better way for individuals to invest. I was just about to start investing in index funds in my

Investor's Business Daily: Jennison 20/20 Focus Looks Both Ways
Jennison 20/20 Focus Fund shoots for winners with both barrels. The managers run a hybrid portfolio, holding both growth and value names.

Cautionary Notes On the ETF Boom - SeekingAlpha
Tom Lydon (ETF Trends) submits: While exchange traded funds have proliferated in the past year, some insiders feel this has gone from ETF evolution to ETF

SmartMoney: All-ETF Portfolios - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time
But for investors who have a lump sum to invest, ETFs are very appealing for their lower fees and better tax efficiency than their mutual fund counterparts. For these investors, the article offers several model portfolios.

Ticker Sense: US ETF Overbought/Oversold
Just like one blowup can damage years worth of work to build up positive reputation (JBLU), one big decline can damage months worth of market gains. After days like yesterday, it is good to review the trading ranges of various stocks,

Herb Greenberg: ETFs, Easy Credit: The Forgotten Risk
But both may now be the bad news, with ETFs helping exacerbate a move down by the markets while the lack of easy credit -- as the ultimate wild card -- may help accelerate it. First, ETFs: "Everybody trades them," says one trader I've

Random Roger's Big Picture: Use Narrowly Themed ETFs? Never!!
Wasik draws a parallel with increased ETF issuance today and dot com IPO mania from the Internet days. The Internet bubble produced countless $50 billion, $100 billion and larger companies. The article picks on the HealthShares ETFs

Moneymonk: New Tool to track ETFs
MSN Money has a site to track ETFs. It may have been out, but I just noticed it today.....pretty cool Click here. http://feeds.feedburner.com/blogspot/YgMA.

New ProShares/Russell ETFs | ETF Trends
ProShares launched 12 new exchange traded funds (ETFs) on the American Stock Exchange. The ETFs carry a 0.95% expense ratio and are geared toward short and magnified exposure to six benchmarked Russell indexes.

Monday links: slicing and dicing ETFs « Abnormal Returns
Wasik in the Bloomberg.com on slicing and dicing in the rapidly growing ETF marketplace. Roger Ehrenberg at Information Arbitrage has a trio of thoughts. David Warsh at economicprincipals.com points to a paper on closet indexing and the

ETFs seek appeal among hedge funds - InvestmentNews
The Vanguard Group Inc., which long has espoused the virtues of buy-and-hold investing, is encouraging hedge funds -- which rank among the most frenetic of investors -- to invest in its exchange traded funds.

Model ETF Portfolios From SmartMoney - SeekingAlpha
Here Are Some Models starts by making the arguments of under what circumstances an investor is better off to stay with the traditional index mutual funds.

February 2007 ETF Performance Report - SeekingAlpha
Tom Lydon (ETF Trends) submits: February ended the month on concerns a correction in the markets may be upon us. ETFs in the mid-cap arena outperformed

24/7 Wall St.: Global ETF Overbought/Oversold
As shown by the red dots that represent where the ETF was trading 5 days ago, markets have come in quite a bit. Most of the global ETFs that were overbought are now at the bottom or below their trading ranges. Tread carefully until we

Gold ETF Hits New High as Gold Approaches $700/Ounce - SeekingAlpha
Tom Lydon (ETF Trends) submits: Gold rallied to a fresh nine-month high on Friday, inching towards the key $700 an ounce level as investor interest in

Salt Lake Tribune - Markets are getting a bit too pleasant and cozy for comfort
Most days it's a pleasant business to check the progress of one's stocks and mutual funds. Too pleasant - a sense of uncertainty and the natural messiness

Kansas City Star | 02/25/2007 | Giant mutual funds carry special burden
Really big mutual funds often are challenges for the companies that run them. Investment styles that managers have promised to follow limit where they put

Nusbaum Rebutes ETF "Advice" | ETF Trends
Roger Nusbaum of TheStreet.com has a few clarifications for those concerned about exchange traded fund (ETF) misinformation. He feels this comes about by a fundamental lack of understanding of the product and the importance