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VMBS

Ultimate Guide To COBO

by on February 18, 2013

Bonds are an enormous investment category, but investors often have to accept one of two related drawbacks with fixed income investments. Bonds where repayment is not an issue (like U.S. government securities) offer very low yields, while higher-yielding bonds like corporate debentures offer significantly greater repayment risk. Covered bonds are something of a “middle ground,” offering a much more secure credit profile than corporates, but also higher yields than government securities. Now investors can take advantage of an ETF that focuses on these fixed income securities: the ProShares USD Covered Bond ETF (COBO, B) [see How To Pick The Right ETF Every Time]. [click to continue…]

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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 more control and greater efficiency in this regard. It is important to note, however, that not all ETFs are created equal when it comes to tax efficiency. Certain asset classes are less efficient than others; bond ETFs, for example, should be expected to incur capital gains taxes with some regularity.

Below, we run through the capital gains results for several of the largest ETF issuers, beginning with the market leader: [click to continue…]

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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 […]

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Free ETF Trading: Comparing All The Options

by on October 22, 2010 | Updated July 9, 2014

As the ETF world continues to grow, the competitive landscape continues to evolve. A growing number of firms have attempted to differentiate themselves by offering unique exposure to asset classes and strategies not previously available–such as funds tracking the Philippine stock market or ETNs linked to the price of industrial metals such as zinc or […]

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Five Critical Questions To Ask When Investing In ETFs

by on February 11, 2010 | Updated July 7, 2014

ETFs surged in popularity in the late 2000s in part because of the numerous advantages they offer over traditional actively-managed mutual funds: lower costs, potential tax efficiencies, intraday trading, and enhanced transparency. But ETFs aren’t without potential drawbacks of their own. Although most funds appear relatively simple on the surface, there are some rather complex […]

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The reasons for the rise of the ETF industry are numerous: intraday liquidity, (potentially) superior tax efficiency, and enhanced transparency relative to traditional actively-managed mutual funds have all contributed to the billions of dollars of inflows that these funds have seen in recent years. But the real attraction for most ETF investors is the reduced […]

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Four Ways To Slash Your ETF Expenses

by on December 10, 2009 | Updated June 30, 2014

The reasons for the incredible rise of the ETF industry are numerous. Intra-day trading, enhanced transparency, and efficient tax features are all features that investors, individual and institutional alike, have embraced in record numbers. But perhaps the main reason why ETFs have attracted hundreds of billions of dollars in assets in recent years is the […]

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Due to the role they played in spawning the recent global financial crisis, mortgage-backed securities are viewed by many as “portfolio poison.” As individual and institutional investors looked to dump these securities last year, the federal government was “forced” to acquire a huge MBS position. With signs of a sustainable recovery popping up, the Fed […]

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