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Six Juicy High Yield Bond ETFs For 2012

Stoyan Bojinov — Wed, 18 Jan 2012 13:00:29 +0000

Equity markets have gotten off to a solid start in the new year, although looming Euro zone debt woes continue to breed some degree of pessimism and one piece of bad news from overseas is very well capable of sparking a broad sell-off that spills over onto Wall Street. The tug of war between positive economic data releases on the home front and turmoil in Europe continues, paving the way for volatile trading across asset classes as investors struggle to decipher which way the markets will tip next. Amidst the ongoing uncertainty, many investors are gravitating towards dividend-paying securities, particularly in the fixed income corner of the market, in an effort to favorably position themselves as the global financial drama develops in 2012. High yield bonds, commonly refereed to as “junk bonds”, have taken on great appeal amongst investors looking to beef up their portfolios’ current return and further diversify [...]

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How To Invest Like UBS In 2012 (Using Only ETFs)

Stoyan Bojinov — Fri, 23 Dec 2011 14:00:58 +0000

Equity markets have taken a wild ride this past year as everything from an unimaginable earthquake in Japan to a looming debt crisis in Europe has taken its toll on investors’ confidence. As 2011 draws to a close, many are left scratching their heads in confusion and uncertainty, given the predominantly gloomy economic outlook that many are expecting for the new year. Financial behemoth UBS has issued its economic outlook for 2012 along with a set of conservative investment principles that are sure to please the defensive-minded crowd worrisome of continuing economic turmoil. Within the detailed 28-page report, UBS Wealth Management Research emphasizes the importance of staying diversified on all fronts given the overhanging debt drama on both sides of the Atlantic. Volatility is expected to remain abundant in 2012 as the Euro zone struggles to restore stability in its debt burdened member nations, while the political gridlock at home [...]

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Getting The Most Out Of Your Bond ETFs

Jared Cummans — Tue, 22 Nov 2011 14:00:44 +0000

Interest in achieving fixed income exposure through exchange-traded funds has been a hot topic in recent years, with some advisors expressing serious concerns over the potential shortcomings in bond ETFs while others have fully embraced the efficiencies of the exchange-traded structure [see Are Bond ETFs Broken?]. The sheer size of the bond ETF space–in terms of both AUM and number of products–has increased dramatically since 2005. But the activity in the space has not been limited to pure growth in assets; a number of interesting innovations in the fixed income ETF arena have helped to address many of the issues that have been cited as potential concerns to investors and to enhance the overall experience of these products. Bond ETFs still aren’t perfect; many of the more popular products that are difficult to replicate exactly, exhibit certain biases that may be undesirable in certain environments and can create for recurring [...]

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PowerShares Launches Fundamental Corporate Bond ETF (PFIG)

Michael Johnston — Thu, 15 Sep 2011 13:54:44 +0000

PowerShares, one of the leading providers of alternative weighted ETFs, announced today the latest addition to its fixed income lineup. The new Fundamental Investment Grade Corporate Bond Portfolio (PFIG) will offer an alternative means of accessing high quality corporate bonds, distinguishing itself from other products in the Corporate Bonds ETFdb Category by the weighting methodology employed by the underlying index. Fundamental Approach PFIG will seek to replicate the RAFI Investment Grade Corporate Bond Index, a benchmark that utilizes the fundamental weighting methodology pioneered by Research Affiliates. Most fixed income indexes–including many of those to which the most popular bond ETFs are linked–assign weightings based on the amount of debt issued and the price of the individual securities. That approach can potentially have some less-than-optimal impacts on the composition of any related ETFs. First, there is a tendency to assign the largest weightings to the largest issuers of debt–a group likely [...]

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May ETFdb Category Kings: Best Performing ETFs

Michael Johnston — Fri, 03 Jun 2011 13:00:43 +0000

The month of May was a generally disappointing stretch for investors, as both international and domestic equity markets struggled to overcome obstacles new and old. Commodities, which had been a nice source of absolute returns for much of the last year, fell on hard times as well; precious metals went into a brief freefall, and most other natural resources saw price declines as well. May demonstrated the importance of a meaningful allocation to fixed income within any long-term portfolio, as most bond ETFs turned in nice gains during the month. The following tables highlight the best performers from each ETFdb Category during the month of May [ETFdb Pro members can download spreadsheets showing performance and expense data for the entire ETF universe]. Equity ETFs Though most equity ETFs finished May in negative territory, there were a handful of bright spots among the hundreds of ETFs that slice and dice the [...]

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HYLD: Crushing The High Yield Bond ETF Competition

Eric Dutram — Tue, 31 May 2011 14:00:57 +0000

Actively managed ETFs have been slow to gain traction so far among most investors for a variety of reasons. Higher than average fees, a boatload of academic evidence suggesting inability of active management to consistently generate alpha, and concerns about disclosure requirements leading to front-running opportunities have all contributed to the relatively slow adoption rate of active equity ETFs. However, while actively-managed ETFs have been slow to catch on in highly liquid and transparent markets–such as large cap U.S. stocks–they have seen a fair amount of interest from investors looking to access asset classes that are generally less efficient. That phenomenon shouldn’t be surprising; there is some evidence that active management may be able to add value in harder-to-price sectors, such as smaller emerging equity markets or corners of the fixed income market. One example of a successful active ETF is the WisdomTree Dreyfus Emerging Currency Fund; CEW, which offers [...]

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State Street Launches Fundamental Corporate Bond ETF (CBND)

Michael Johnston — Thu, 07 Apr 2011 14:35:54 +0000

Innovation continues to be a defining characteristic of the quickly growing fixed income ETF space, as evidenced by the launch of the SPDR Barclays Capital Issuer Scored Corporate Bond ETF (CBND) on Thursday by State Street. The new ETF will seek to replicate the performance of the Barclays Capital Issuer Scored Corporate Index, a benchmark that includes U.S. dollar denominated corporate issues that are rated investment grade (Baa3/BBB- or higher) by at least two of the big three ratings agencies. CBND will be unique from existing products in the Corporate Bonds ETFdb Category because of the manner in which the underlying index is constructed. That methodology involves both determining the weightings attributed first to individual issuers and then to security weights. Individual issuers in the related benchmark are weighted based on three fundamental financial ratios (only debt issued by companies with publicly-traded stock are eligible for inclusion). Those ratios include: [...]

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Arnott Talks Fundamental Indexing, Bond ETFs, And More

Eric Dutram — Mon, 28 Mar 2011 13:00:12 +0000

Rob Arnott is the founder of Research Affiliates, a global leader in innovative investing and asset allocation strategies. The firm is perhaps best known for its role in developing fundamentally-weighted indexes that utilize the RAFI methodology. This strategy involves selecting and weighting securities by fundamental measures of company size, as opposed to market capitalization. The methodology captures many of the benefits of passive investing—such as transparency, objectivity, broad economic representation, and diversification—with less exposure to pricing errors and fads. Several ETFs are linked to RAFI indexes, including several PowerShares products and a long/short ETF from ProShares. Rob recently sat down with ETF Database to talk about some of the limitations of traditional cap weighting methodologies, why alternatives have been slow to catch on, and what fundamental indexing can bring to the bond space: ETF Database (ETFdb): Why do you think market-cap weighting is the dominant force in the equity ETF [...]

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Bond ETF Ideas: Room For Growth In Fixed Income Arena

Michael Johnston — Mon, 14 Mar 2011 13:00:43 +0000

The last few years have seen tremendous growth in ETF assets, as investors have gradually embraced the exchange-traded structure as a tool for establishing exposure to everything from emerging markets to micro cap stocks to commodities. Interest in bond ETFs has been particularly strong; according to year-end data from the National Stock Exchange, bond ETFs saw inflows of more than $26 billion in 2010 and finished the year with close to $130 billion. Those figures represent impressive growth, but considering the importance of fixed income to almost every investor portfolio and the well-known advantages of the ETF structure it is perhaps surprising that the bond ETF space isn’t bigger–a lot bigger. Part of the explanation for the relatively slow adoption of bond ETFs may lie in the disconnect between the cash flow profiles of most products and those of individual bonds. A significant part of the “bond experience” is the [...]

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Recapping Impressive Innovation In Bond ETF Space

Michael Johnston — Fri, 11 Mar 2011 14:20:52 +0000

Creativity on the product development front has become a defining characteristic of the ETF industry, as the surge in the number of ETF offerings in recent years has been driven not by duplication but by innovation. Many of the new fund launches are first-to-market concepts, offering exposure to asset classes or strategies not previously available within the ETF wrapper. The bond ETF space in particular has seen a number of major developments in recent years, and many of the ETF newcomers have become popular among investors and furthered huge asset growth rates. PowerShares isn’t generally thought of as a major player in the fixed income ETF arena, but the Wheaton, Illinois-based firm behind the ultra-popular QQQQ has rolled out a couple first-to-market products over the last year. The first was more of an adjustment; the company switched the index underlying its junk bond ETF from a Wells Fargo benchmark [...]

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ETF Database » PHB

Six Juicy High Yield Bond ETFs For 2012

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How To Invest Like UBS In 2012 (Using Only ETFs)

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Getting The Most Out Of Your Bond ETFs

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PowerShares Launches Fundamental Corporate Bond ETF (PFIG)

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May ETFdb Category Kings: Best Performing ETFs

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HYLD: Crushing The High Yield Bond ETF Competition

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State Street Launches Fundamental Corporate Bond ETF (CBND)

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Arnott Talks Fundamental Indexing, Bond ETFs, And More

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Bond ETF Ideas: Room For Growth In Fixed Income Arena

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Recapping Impressive Innovation In Bond ETF Space

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