ETF Updates Archive

Tracking Error, the Forgotten Cost of ETF Investing

When investing in ETFs there are many things to consider when choosing an ETF to represent a particular asset class or investment category.  Costs, both explicit and implicit are important to consider and these costs should be taken into account.

ETF Investor Research

ETF MarketPro met with John Meunier, Principal at Cambridge-based Cogent Research to discuss his firm's findings on ETF investing.

The recently completed study of 4,000 affluent Americans found that interest, usage and commitment to ETFs is significantly higher among self-directed investors who manage their own portfolios.

Know Your Investments: ETNs

I recently returned from Singapore where I participated in the Asia Indexing Conference.

My Day 1 role was presenting to my Asian peers the difference between an Exchange Traded Fund (ETF) and a Exchange Traded Note (ETN).

We hear a lot today about ETFs. ETFs are certainly great products that reduce company risk and allow for superior diversification. I want to discuss the ETF’s Cousin, Exchange Traded Notes. Both ETFs and ETNs track an assigned index, trade like a stock and are very liquid. The similarities stop here.

ETFs are structured such that the shareholder owns a basket of securities. Should the ETF provider go bankrupt or shutdown the ETF, the shareholder will usually receive cash for the market value of the basket of securities.

Check Those Dividend Checks

A new problem is emerging for cash-strapped income investors.  Dividends may be coming in the form of more stock instead of cash.

The IRS requires REITs and Close End Funds to distribute the vast majority of income to investors each year in the form of capital gains and dividends. However, the IRS has changed the rules in response to the market downturn and is now permitting REITs and Closed End Funds to substitute shares for cash.

Credit Markets Show Signs of Thawing

Monday's annoucement that Cisco successfully raised $4 billion at low interest rates is another sign that the credit markets are beginning to unfreeze.

Since the beginning of the year, investment grade U.S.