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Comparing Three Diversified Portfolio ETFs

Eric Dutram — Wed, 20 Apr 2011 11:24:50 +0000

As the ETF world has grown over the past few years, investors have had the opportunity to access a number of different asset classes that were once off-limits to the average investor. Products targeting a number of currencies, commodities, and emerging markets that were at one time inaccessible to all but the biggest and most powerful investors can now be traded by nearly any investor, opening up a wide world of possibilities to spread risk around and achieve alpha in a portfolio. Many of the new introductions to the ETF world have offered increasingly granular exposure–focusing, for example, on specific sub-sectors or small international economies. But some have been designed to appeal to investors looking to simplify their portfolio instead of tweaking exposure with the newest choices out there. If ETFs like the Smartphone fund from First Trust (FONE) are precise tools for fine tuning a portfolio’s exposure, there are a number of extremely blunt [...]

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State Street Plans Active ETFs

Michael Johnston — Fri, 08 Apr 2011 11:00:50 +0000

The dawn of the second quarter of 2011 has seemingly brought a fresh round of momentum to the active ETF space, as the logjam at the SEC has been broken–at least initially–and some major names in both the ETF and mutual fund space have inched closer towards rolling out actively-managed ETFs. State Street, the issuer behind the two largest U.S.-listed passive ETFs, became the latest to throw its name into the ring as a potential issuer of active ETFs. In a recent SEC filing the company detailed six active ETFs covering various asset classes and investment strategies: SSgA Real Assets ETF: This fund would seek “to achieve real return consisting of capital appreciation and current income” according to the filing, and would invest primarily in exchange-traded products offering exposure to four asset classes: 1) TIPS, 2) domestic and international real estate, 3) commodities, and 4) equities of companies in the [...]

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Size Does Matter (To a Point): Study of ETF Liquidity

Michael Johnston — Thu, 11 Jun 2009 07:00:36 +0000

As the ETF industry has exploded on to the scene in recent years, sponsors have aggressively launched funds in an attempt to gain market share. While many of these new ETFs have attracted sufficient investor funds to justify continued operation, some have failed to garner a level of investment necessary to support an active, liquid market and been shuttered. And then there are those that remain in business but are cited as having “insufficient liquidity.” Although there are certain rules of thumb – assets under management (AUM) of $25 million and daily volume of 25,000 are often cited as “liquidity thresholds” – there is no hard evidence to support these guidelines. In an effort to determine where illiquidity ends and an active market begins, I analyzed the impact of size and daily volume on the liquidity of various ETFs. To start, I divided ETFs into six baskets based on three-month average daily [...]

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Comparing Three Diversified Portfolio ETFs

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State Street Plans Active ETFs

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Size Does Matter (To a Point): Study of ETF Liquidity

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