The rise of ETFs has led to the democratization of many asset classes which were once reserved for the ultra-rich. While investors have quickly adapted to ETFs offering exposure to commodities and quantitative strategies, another alternative asset has also seen a recent surge in popularity. Traditionally, hedge funds have been known for their ability to deliver strong returns with low volatility and low correlations to other asset classes. These returns often come in return for big fees; hedge funds generally charge 2% of assets per year plus 20% of profits, enabling fund managers to live handsomely off of profitable investments. Furthermore, some hedge funds require that their investors earn a minimum amount of money annually and have a net worth of more than $1 million, thereby limiting the universe of available investors. [click to continue…]
PIMCO, the bond fund giant that has quickly become a major player in the fixed income ETF space, is looking to expand its ETF presence even further. The Newport Beach, California-based firm has filed for SEC approval on six new bond ETFs, including: [click to continue…]
Yesterday’s rally failed to carry over to Wednesday’s session, as Fed Chairman Bernanke detailed plans to tighten credit and suggested that the rate paid to banks on excess reserves may become the main policy tool. France and Germany continued to weigh options for propping up Greece’s mounting budget issues, even as Greek civil servants went [...]
Whenever a company prepares for a public offering, executives have been known to spend an inordinate amount of time choosing the combination of letters that will serve as the company’s ticker and often nickname within the investment community. To many, the fixation on selecting the perfect ticker seems like an irrational obsession on par with [...]
Following the unprecedented economic turmoil, market volatility, and government intervention of the last two years, many investors felt that the painful lessons from the downturn had yielded a “new normal.” The term, coined by PIMCO executive Mohamed El-Erian, has seen its scope expand to describe an era where risk aversion runs high, caution trumps emotion [...]
The rise of the ETF industry has been impressive, expanding from virtually no listings ten years ago to about 900 today. And there is still plenty of room for growth. As we head towards the end of a wildly successful year for the ETF industry, ETF Database is taking a look forward, making our predictions [...]
When constructing the fixed income component of portfolios, most individual investors and financial advisors focus primarily on debt issued by the U.S. government and high quality corporate debt. But the fixed income universe goes far beyond Treasuries and investment grade corporate bonds. Many investors have embraced junk bonds as quasi-hybrid investment, a bridge between equities [...]
Despite my best efforts, I doubt we’ll ever see a definitive end to the debate over active stock picking versus passive indexing. Both sides have their staunch advocates, and in a strange way, both strategies need each other to survive.
Maybe the fixed income space will be different.
Last month, the Wall Street Journal’s Sam Mamudi covered [...]
As the ETF industry has expanded in recent years, a significant percentage of the expansion has come from equity ETFs embracing new regions and investment styles and from commodity funds offering small investors exposure to resources that were previously available only to the ultra-rich (although position limits are threatening to restrict access to numerous commodity [...]
Newport, California-based Pacific Investment Management Company (PIMCO) launched its first ETF today, becoming the latest mutual fund company to venture into the rapidly-expanding ETF industry. Unlike many new ETFs that have tried to attract capital by tracking previously uncovered niche indices (such as emerging markets sectors), PIMCO will compete directly with established funds, relying on [...]
