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Seven Surprising ETF Holdings: Why Investors Should Always Look Under The Hood

Michael Johnston — Mon, 20 Jun 2011 14:00:06 +0000

The old adage “never judge a book by its cover” has been applied to a wide variety of situations over the years, from encouraging open mindedness in social situations to shopping for a car to, well, judging books by their covers. And it turns out this piece of advice can be quite valuable for investors as well, especially those who have embraced ETFs as tools for building long-term portfolios or establishing short-term tactical tilts. For investors who wish to take a longer look under the hood of a product, the transparency offered by ETFs allows them to do just that; most products publish a complete list of holdings on a nightly basis, allowing for a complete review of components that isn’t possible with mutual funds and various other types of securities. In most cases, the holdings of an ETF are fairly predictable; most investors could guess the primary components of [...]

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For ETF Investors, The Details Matter

Michael Johnston — Mon, 10 Jan 2011 14:32:40 +0000

When constructing a portfolio, most investors focus on the decisions that seem to have the most significant impact on the risk/return profile delivered. How much should be allocated to stocks vs. bonds? What breakdown between developed and emerging markets is desired? What sectors should be overweight, and which should be avoided? These decisions obviously go a long way towards determining the bottom line returns delivered by a portfolio. But for investors who have embraced ETFs as a means of achieving exposure, there are a number of seemingly minor factors that can have a surprisingly large impact on their financial health. Below, we highlight five of these easy-to-overlook considerations that can add up to big differences in return [for more ETF insights, sign up for our free ETF newsletter]: 1. Weighting Methodologies Many ETF investors pay a great deal of attention to certain attributes of their equity exposure, such as the [...]

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Ten Shocking ETF Charts From The “Flash Crash”

Michael Johnston — Fri, 07 May 2010 14:30:08 +0000

An already tumultuous day took a terrifying turn in afternoon trading on Thursday, as several major U.S. indexes lost multiple percentage points in a matter of minutes before reclaiming big chunks of the ground lost. At 2:40 on Thursday, the Dow Jones Industrial Average was down about 415 points, putting it on pace for one of its worst days of the year. But the worst was yet to come; by 2:47, just seven minutes later, the Dow had plummeted another 583 points, putting it down nearly 1,000 points for the day. In the next ten minutes, the Dow jumped more than 600 points; by 2:57 it was down “only” 388 points on the day. The steep decline immediately sparked speculation on Wall Street. Anxiety had been building over the deteriorating situation in Greece, but there seemed to be more at work behind the sudden plunge (see Six ETFs To Watch [...]

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Fidelity To Offer Commission-Free Trading On 25 iShares ETFs

Michael Johnston — Tue, 02 Feb 2010 17:33:13 +0000

Fidelity Investments announced today that it will offer its retail customers commission-free online trades for a suite of 25 iShares ETFs. The funds included in the commission-free platform include ETFs in all nine domestic equity style/size categories, as well as international equity and fixed income options. “Fidelity has partnered with the leading ETF provider in the market to bring investors the best brokerage offering in the industry today,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments. “Simply put, we’re offering the broadest selection of commission-free ETFs from the undisputed ETF leader, and it’s only available through Fidelity.” The iShares ETFs will be available for commission-free trading beginning tomorrow. Commission-Free iShares ETFs Value Blend Growth Large Cap IVE, IWD IVV, IWB, IWV IVW, IWF Mid Cap IJJ IJH IJK Small Cap IJS, IWN IJR, IWM IJT, IWO EAFE EFA, SCZ Emerging Markets EEM Global ACWI Total Bond Market [...]

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Schwab Launches Two Large Cap ETFs

Michael Johnston — Fri, 11 Dec 2009 14:59:32 +0000

Charles Schwab has expanded its line of low cost ETFs from four to six, adding the Schwab U.S. Large-Cap Growth ETF (SCHG) and Schwab U.S. Large-Cap Value ETF (SCHV) to its lineup on Friday. Similar to the four funds launched in November, these large cap ETFs can be bought and sold commission free online in Schwab accounts. Schwab’s initial four funds had included a large cap (SCHX), broad market (SCHB), small cap (SCHA), and international equity (SCHF) ETFs. “Individual investors and investment advisors count on Schwab for products which provide exceptional value, and our clients have indicated an interest in ETFs as a way to invest in and trade entire segments of the market,” said Peter Crawford, senior vice president at Charles Schwab & Co., Inc. “These two new ETFs allow investors to tilt their portfolios based on whichever style, growth or value, they think will lead the market in [...]

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Chrales Schwab ETFs: Uphill Battle Ahead

Michael Johnston — Thu, 23 Jul 2009 13:21:55 +0000

Charles Schwab, one of the world’s best known and largest asset management firms, recently took another step towards finally breaking into the rapidly-expanding ETF industry. Earlier this month, Schwab filed paperwork with the SEC to launch nine ETFs. The proposed funds will have the benefit of the Schwab name (and the tremendous resources that come along with it), but will still face an uphill battle, given the firm’s late arrival to a now very crowded market. According to ETF Trends, Schwab’s first nine ETFs will include six broad-based domestic funds and three international funds. The domestic ETFs will track Dow Jones indexes, while the international ETFs will follow FTSE benchmarks: Schwab U.S. Broad Markets ETF Schwab U.S. Large Cap ETF Schwab U.S. Large Cap Value ETF Schwab U.S. Large Cap Growth ETF Schwab U.S. Mid Cap ETF Schwab U.S. Small Cap ETF Schwab U.S. International Equity ETF Schwab U.S. International [...]

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Are Value ETFs Leading Us Out Of The Recession?

Michael Johnston — Thu, 25 Jun 2009 06:05:08 +0000

Conventional wisdom says that while growth stocks outperform their value counterparts during recessions, value stocks gain the upper hand once the economy hits bottom, leading the way during the early recovery stage of most economic cycles. That’s according to a report by Russell Investments of Tacoma, Washington, which indicates that growth outperformance tends to reverse as soon as the economy bottom. So what are the numbers telling us about the market’s bullish run over the past few months? Is it the beginning of a recovery or simply another glimmer of false hope? Here’s the logic behind the “rules of thumb,” according to an article by Dan Jamieson: during recessions, the fundamentals of value companies tend to deteriorate rapidly, leading to underperformance. Financial companies are particularly susceptible to underperformance (a trend once again characteristic of this recession). Once the economy “turns,” however, companies with low price-to-book and price-to-earnings ratios are often among the [...]

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Swine Flu In Focus: Four ETFs To Watch

Michael Johnston — Fri, 12 Jun 2009 10:00:54 +0000

With the WHO’s announcement that it has officially declared an H1N1 flu pandemic – the first global flu epidemic in 41 years – swine flu has Wall Street’s full attention once again. Disease fears had mostly faded from the mind of many investors, despite numerous warnings that we weren’t yet fully in the clear. While the WHO’s announcement is, on the whole, bad news for equity markets, I wrote yesterday that pharmaceutical and healthcare ETFs may stand to benefit from prolonged fears over an outbreak. As with most major developments, there’s another side to the coin. Here’s a look at four ETFs that could face downward pressure in the wake of the pandemic declaration: iPath Dow Jones UBS Livestock ETN (COW): Since the beginning of the swine flu scare, prices for lean hogs have been tumbling as worries over import bans and consumer reactions. COW, which is invested about 35% in lean [...]

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Guide to ETF Index Weightings

Michael Johnston — Tue, 02 Jun 2009 06:05:29 +0000

ETFs have enjoyed a tremendous surge in popularity in part because they allow investors to gain exposure to a broad (or narrow) market index in a timely and cost efficient manner. When implementing their investment strategy through construction of an ETF portfolio (or when using ETFs to round out a portfolio), investors have the option to choose from dozens of equity indices, as well as numerous commodity and fixed income benchmarks. While the underlying constituents of each index obviously vary from index to index, the manner in which returns are calculated and individual stocks are weighted can also be quite different. Here’s a quick guide to understanding the various weighting methodologies applied to most market indices. Price-Weighted Index In a price-weighted index, each component stock makes up a fraction of the index proportional to its trading price. Think of a price-weighted index as if it holds one share of each [...]

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ETF Database » IVW

Seven Surprising ETF Holdings: Why Investors Should Always Look Under The Hood

Related Posts:

For ETF Investors, The Details Matter

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Ten Shocking ETF Charts From The “Flash Crash”

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Fidelity To Offer Commission-Free Trading On 25 iShares ETFs

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Schwab Launches Two Large Cap ETFs

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Chrales Schwab ETFs: Uphill Battle Ahead

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Are Value ETFs Leading Us Out Of The Recession?

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Swine Flu In Focus: Four ETFs To Watch

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Guide to ETF Index Weightings

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