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101 ETF Lessons Every Financial Advisor Should Learn

Michael Johnston — Wed, 23 May 2012 12:00:06 +0000

Exchange-traded funds (ETFs) have burst on to the scene in the last few years, raking in hundreds of billions of dollars in assets and prompting a major shift towards indexing strategies in the process. ETFs have empowered financial advisors (FAs), registered investment advisors (RIAs), Chief Financial Officers (CFOs), money managers, and retail investors to take greater control over their portfolios, pushing down fees and maxing out tax efficiency in the process. While ETFs appear quite simple on the surface, these securities can be quite complex. In order to get the most out of ETFs, there’s a lot that investors need to know about the structure, opportunities, and limitations of these securities. Below we outline just about everything you need to know about ETFs, from the basics to the more sophisticated aspects of these products. 1. ETFs Are Tax Efficient One of the biggest advantages of ETFs is their tax-efficient structure; [...]

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Hitchhiker’s Guide To The ETF Galaxy

Michael Johnston — Mon, 14 May 2012 13:00:23 +0000

At times, it seems as if the number of ETFs available to U.S. investors will soon exceed the number of stars in the sky. That might be overstating things a bit, but the pace of expansion in the ETF industry has truly been impressive over the last several years. With multiple products seemingly debuting every week and very few shutting down (despite countless predictions to the contrary), the size of the ETF lineup has effectively doubled in a relatively short period of time. And there’s no indication that the product development front is going to be slowing down any time soon; issuers continue to file for both innovative and duplicative products, producing a pipeline full of hundreds of funds that could debut at some point in the next several months [see also 3 ETFs For A Euro Zone Double-Dip]. The proliferation of ETFs, ETNs, and other exchange-traded cousins of these [...]

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9 Things Investors Need To Know About The PIMCO Total Return ETF

Michael Johnston — Thu, 01 Mar 2012 14:30:28 +0000

Today brings the most anticipated ETF launch of the last several years, with PIMCO debuting an exchange-traded version of its popular Total Return Bond Fund (TRXT). The new ETF, PIMCO’s fifth actively managed product, is managed by bond guru Bill Gross–who is widely regarded as the top fixed income manager in the world. The move by Gross and PIMCO into the fixed income space has been already been analyzed from countless angles, including evaluation of the impact it will have on the active ETF space and the impact the resulting “cannibalization” could have on PIMCO’s bottom line. The launch of TRXT has been a hot topic in recent days; Ari Weinberg at Forbes, Olly Ludwig at IndexUniverse and Tom Steinert-Threlkeld at Financial Planning have already put out great pieces highlighting the basics and some of the nuances of the potentially game-changing fund. Today, we’re taking a look at nine more aspects [...]

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PIMCO Total Return ETF (TRXT): An Active ETF Gamechanger?

Michael Johnston — Thu, 01 Mar 2012 12:00:59 +0000

Bond fund giant PIMCO launched its highly anticipated Total Return ETF (TRXT) on Thursday, bringing to market an exchange-traded version of the mutual fund that has accumulated about $250 billion in assets since its debut in the 1980s. The new ETF is the most eagerly anticipated product launch of the last several years–perhaps throughout the relatively brief history of the ETF industry. The new actively-managed ETF will be under the direction of bond guru Bill Gross, one of the most successful and respected fixed income strategists. Total Return Fund Legacy TRXT will be benchmarked against the Barclays Capital U.S. Aggregate Bond Index, a broad-based measure of investment grade bonds from U.S. issuers. Gross has consistently outperformed that benchmark since the product launched more than two decades ago, generating excess returns of close to 100 basis points annually. The fund has, of course, had a few bumps in the road; last [...]

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iShares: The Low Cost ETF Issuer?

Michael Johnston — Wed, 08 Feb 2012 12:00:44 +0000

With more than 40% of the U.S. market, iShares has long been the leader in the U.S. ETF industry. But in recent years the competition has been gaining ground, thanks in part to more cost efficient products. According to the ETF Industry Association, Vanguard led all ETF issuers with almost $36 billion in cash inflows last year, handily exceeding the $28.8 billion iShares took in. Much of the difference in inflows between the two was related to a small group of ETFs linked to identical indexes but distinguished by cost differentials; the cheaper Vanguard funds drew significantly more interest than competing iShares ETFs. The biggest differential related to the emerging markets ETFs offered [see also The Ten Commandments of Commodity Investing]: Ticker ETF Index Expense Ratio 2011 Flows VWO Vanguard MSCI Emerging Markets ETF MSCI Emerging Markets Index 0.22% $7,808 EEM iShares MSCI Emerging Markets Index Fund MSCI Emerging Markets [...]

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PIMCO’s Total Return ETF (TRXT) To Debut In March

Michael Johnston — Thu, 12 Jan 2012 12:00:21 +0000

There are hundreds of exchange-traded products at various points in the product development pipeline, but perhaps none of the funds that could debut in 2012 are as highly anticipated as the PIMCO Total Return Exchange-Traded Fund (TRXT). The bond fund giant had previously filed for approval for an ETF version of the world’s largest bond mutual fund, and now seems set to begin trading the product in early March; according to a brief statement on the company’s Web site, Thursday March 1 will be the first day of trading for TRXT. The new ETF will be actively managed by Bill Gross, PIMCO’s founder and co-Chief Investment Officer. Gross is perhaps the best-known and most respected bond investor in the world, boasting an impressive track record of fixed income management. Launched in 1987, the Total Return Fund has accumulated nearly $250 billion in assets. Since inception, the mutual fund version has [...]

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ETFs: The $10 Billion Club

Jared Cummans — Wed, 11 Jan 2012 12:00:03 +0000

It is no secret that the ETF industry is dominated by just a handful of products. The majority of the $1 trillion plus assets are confined to roughly 100 funds, leaving the other 1,300 ETFs in the dust. But as growth in the industry continues to pick up, more and more funds are entering elite status with hefty assets and trading volumes to go with it [see also Top 5 Commodity ETFs Of 2011]. Investors who are still a bit squeamish about buying into some of the smaller and more hypertargeted products, have a wealth of options available to them. A number of advisors and institutions have minimum requirements for assets under management for the products that they can buy. Along with assets restrictions there are often regulations on age and average daily volume. But for those looking for a fund that meets such strict demands, combing through the entire ETF universe [...]

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Tax Efficiency Report Card

Daniela Pylypczak — Tue, 10 Jan 2012 12:00:24 +0000

The year-end periods provides the ETF industry with a couple of opportunities to flex its collective muscle; performance comparisons generally tend to favor those products with lower expense ratios–a defining feature of exchange-traded funds. But early January also puts another benefit of exchange-traded products into focus: enhanced tax efficiency relative to traditional mutual funds. The nuances of the exchange-traded structure have the potential to bring additional tax efficiencies to investors thanks to the availability of an “in kind redemption” that ultimately gives investors more control over the timing of tax obligations. Mutual funds, on the other hand, have a nasty tendency to stick remaining shareholders with tax liabilities incurred as a result of redemptions by others–a development that can obviously be undesirable [see Tax Loss Harvesting With ETFs: 6 Ideas To Lower Client Liabilities]. ETFs won’t allow investors to skip out on their taxes, but this product structure can deliver [...]

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ETF Insider: Beware Of Lingering Euro Fears

Stoyan Bojinov — Mon, 09 Jan 2012 18:17:46 +0000

Equity markets hit the ground running last week as investors came back from the holiday weekend with a fairly optimistic outlook for 2012. U.S. stocks started off the year with a solid rally as investors’ confidence was bolstered by multiple better-than-expected economic data reports; consistent improvements in the housing market coupled with a downtick in the unemployment rate were enough to reignite bullish momentum on Wall Street. Gold inched higher last week, climbing back over $1,600 an ounce, although the precious metal continues to face headwinds given the looming uncertainty stemming from the Euro zone. Weekly Outlook The coming week will be fairly busy with activity and economic data releases both at home and on the international front. Below, we highlight ETFs that may see an increase in trading activity as relevant market data is released and evaluated by investors: Van Eck Market-Vectors Chinese Renminbi/USD ETN (CNY): China’s consumer price [...]

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2011 Recap: Another Big Year For ETFs

Michael Johnston — Mon, 09 Jan 2012 11:45:14 +0000

The ETF industry finished 2011 with assets of about $1.06 trillion according to data recently released by the ETF Industry Association. Total assets grew by about 5% over the previous year, when the industry stood at $1.01 trillion. Net cash inflows for the year totaled about $117.6 billion, a slight decrease from 2010 when the industry took in $118.7 billion. In 2009, total ETF inflows tallied about $119.4 billion, meaning that creations have been remarkably consistent over the last three years. December was one of the best months of the year from a cash inflows perspective; approximately $16.2 billion, or about 14% of the annual total, came in during the final month of the year. U.S. equity ETFs accounted for about $41.3 billion in inflows, or approximately 35% of the industry total. But the real growth came in the fixed income arena; bond ETF assets grew from about $129 billion [...]

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ETF Database » BND

101 ETF Lessons Every Financial Advisor Should Learn

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Hitchhiker’s Guide To The ETF Galaxy

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9 Things Investors Need To Know About The PIMCO Total Return ETF

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PIMCO Total Return ETF (TRXT): An Active ETF Gamechanger?

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iShares: The Low Cost ETF Issuer?

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PIMCO’s Total Return ETF (TRXT) To Debut In March

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ETFs: The $10 Billion Club

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Tax Efficiency Report Card

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ETF Insider: Beware Of Lingering Euro Fears

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2011 Recap: Another Big Year For ETFs

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