Displaying items by tag: ETFs

Direct Indexing is the process of holding the stocks in the weights of the underlying Index, rather than buying an ETF that tracks an index, and this new opportunity is being adopted by financial heavyweight Charles Schwab and will be available to investors. Starting with the large-cap Schwab 1000 Index, S&P Small Cap 600 Index and MSCI KLD 400 Social Index, Schwab will be available to mix and match to customize a portfolio to hit the investor’s exact needs. However, this option won’t be available to just any investor. The indexing platform will require a $100,000 account size. Adoption of direct index investing is one piece of Schwab’s expansion into personal investing, that goes hand-in-hand with environmental, social, and governance investing and other thematic investing.


FINSUM: Schwab is the latest of Vanguard, Fidelity, BlackRock and Morgan Stanley to jump into index investing. However, Schwab’s pricing format is not revealed and its advantages over a low fee ETF are not yet clear.

Published in Wealth Management
Saturday, 16 October 2021 10:21

Active ETFs are Winning, Why You Need Them

(New York)

Active ETFs have grown in popularity, doubling in the last two years, and they are starting to reverse the 30-year index trend invented by John Bogle. Mutual fund giants such as Fidelity, T.Rowe Price, Franklin Templeton, and American Century all have opened active funds. Driving this inflow is a series of regulatory changes that protect active fund insights and make them more tax efficient. SEC regulations have allowed semitransparent ETFs to use custom baskets and move around stocks in order to not realize gains. Semitransparent ETFs have better liquidity which allows them to cut the high transactions costs of yesteryear. Some of the fastest-growing funds are Cathie Wood’s ARK Innovation, but JPMorgan’s Ultra-Short Income, PIMCO Enhanced Short Maturity and JPMorgan’s Equity Premium Income. Finally, the current environment is allowing active funds to edge out. Active funds have thematic interests that satisfy investors at lower costs than traditional funds, and pickers outperform when there is high dispersion (as there is now).


FINSUM: Active funds are cutting costs to some of the lowest levels historically and in these tumultuous times that makes them as competitive as ever.

Published in Eq: Total Market
Saturday, 16 October 2021 10:18

Crypto’s on Fire: Bitcoin Surges to 60k

Bitcoin flew by $60,000 and is approaching all-time highs. This was a 4% climb in less than a day. Speculation is what pushed the world’s most prominent cryptocurrency higher, as it seems it seems regulators will be approving the first bitcoin exchange-traded fund. While there hasn’t been anything official, the ETF is set to launch at the NYSE on Tuesday, and investors are expecting the SEC to not object. Investors like Mikkel Morch, executive director at ARK36, are putting $65k price target on bitcoin. The rally wasn’t widespread in all crypto as both XRP and ADA slumped. Regulation is still one of the largest risks as central banks and governments around the globe are weary to embrace. Jon Cunliffe Dpubbt BoE Governor said crypto could spark a 2008 sized financial crisis.


FINSUM: Chinese regulators were the biggest threat to crypto earlier this year, but it appears the U.S. is moving more progressive on crypto regulation moving forward.

Published in Alternatives
Wednesday, 15 September 2021 19:30

Active Funds are Outperforming

Active funds are finding themselves in a better position than ever. Outflows are at their lowest levels in over half a decade, inflows are starting to swell, so what is the key to their success? The predominant factor driving them is the wide range of dispersion in the stock market’s performance. Sure, the aggregate performance has been great post-pandemic but the difference between the bottom and top quintiles has been above average for the last year. This gives pickers an advantage over passive funds. They are making their picks by not overreacting to inflation news and doubling down on stocks that benefit from stay-at-home orders and the covid environment. Active funds tend to downplay value-oriented stocks, and the few they are bullish on are bargains in communications companies. Finally, Facebook is the through-line, as nearly two-thirds of active funds hold the largest social network.


FINSUM: This is definitely a ‘pickem’ environment with large dispersion in the S&P 500, and broad index/passive funds will lag active managers.

Published in Eq: Large Cap
Monday, 13 September 2021 20:00

Here is the Best Model Portfolio

(New York)

Model portfolios are seeing great inflows recently, but their popularity has created its own problems. The biggest of those problems—a dizzying proliferation of funds. Today we are going to make an off-the-cuff recommendation. How about a one-stop, no fee “model portfolio” for retirement. The model portfolio? Buy these four ETFs: the Vanguard Total Stock Market ETF (VTI), the Vanguard Total International Stock ETF (VXUS), the iShares Core Total USD Bond Market ETF (IUSB), and the Schwab US REIT ETF (SCHH).


FINSUM: This is in jest of course, but this is a dead simple and well-conceived set of ETFs for retirement.

Published in Wealth Management
Page 42 of 62

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