In recent years, investors have begun moving away from traditional active management in favor of more cost-efficient indexing strategies. The result has been a tremendous surge in the popularity of ETFs and a serious threat to actively-managed mutual funds that have dominated the investment industry for decades. As market indexes have transitioned from performance benchmarks to investable baskets of securities, the underlying methodologies have, not surprisingly, been the subject of increased analysis and scrutiny. As many investors now know, the system used to select and weight individual components can have a major impact on bottom line returns. And there are a number of ETF issuers out there who think they’ve come up with superior alternatives to the methodologies used by the vast majority of investors. [click to continue…]
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.” [click to continue…]
The wild ride on Wall Street continued on Thursday, with stocks posting big gains as Starbucks and CBS posted profits and retail sales moved slightly higher for the last month. Cisco led tech stocks higher, driving the Dow to a gain of more than 200 points for the first time in three months. The ETFdb [...]
Over the last year, leveraged ETFs have been the subject of intense scrutiny from a number of parties, including regulatory agencies, state governments, broker-dealers, individual investors, and even class action lawyers. While several aspects of leveraged ETFs have been thoroughly analyzed and debated, perhaps no issue has drawn more attention than the effects of compounding [...]
ProShares, known for pioneering short and 2x leveraged and inverse leveraged ETFs, is once again blazing a new trail in the ETF industry. The fund family has filed for approval from the SEC to launch two new ETFs, a 3x S&P 500 fund and a 3x inverse S&P 500 fund. ProShares‘ proposed funds would be the [...]
To paraphrase Vanguard Group founder Jack Bogle, we now know what many have suspected for a long time: indexing has changed the world of investing. Withall of the developments in the indexing world, and in particular the ETF industry, it is easy to get caught up in the excitement, focusing exclusively on the positive developments [...]
It’s good to know that we’re not alone. It seems our neighbors to the north are struggling with the issue of leveraged ETFs as well. Last week, the Investment Industry Regulatory Organization of Canada (IIROC) issued recommendations aimed at eliminating inappropriate use of these funds by investors unaware of their risk profiles and the manner [...]
In the week during which the Obama administration will unveil details surrounding its plan to revamp the regulation of the U.S. financial sector, calls for increased oversight of the ETF industry are picking up steam as well. Scott Burns, director of ETF Analysis at Morningstar, recently laid out a case for increased regulatory requirements for ETFs [...]
Leveraged ETFs are among the most actively-traded securities on any market in the world today, with some turning over several times daily and maintaining average investor holding periods of less than an hour. And their popularity appears to be on the rise, as these funds regularly top the list of monthly ETF inflows released by [...]
