Exchange-traded funds are not required to pay brokerage firms a 12-b1 fee to be held in an account, but one ETF company appears to be preparing for this. As the number of ETFs expands and marketing expenses rise, brokerage firms are stepping up pressure on ETF companies to pay them 12b-1 fees. In response, SSgA [...]
Schwab ETFs Struggle in the Shadow of Vanguard
May 14, 2012 By
Charles Schwab would like to say they have Vanguard ETFs in their sights, but that would require a very powerful telescope. It isn’t realistic to compare the two ETF providers yet because Vanguard dominates in number, total assets, and even performance. That being said, I commend Schwab’s efforts to promote low-cost index investing and hope [...]
Horseshoes, Hand Grenades and Asset Allocation
May 7, 2012 By
Ask people to name two things where being close counts and you’ll likely hear the popular idiom horseshoes and hand grenades. Getting close is good enough in the game of horseshoes where a toss landing near the stake scores points. With grenades, a wide fragmentation radius ensures anything close becomes a casualty. You can add [...]
Betsy the Cow Loves Index Funds
May 4, 2012 By
Betsy the Cow knows something that most investors don’t, and it’s the reason she buys index funds. Betsy knows that the milk she and her friends produce gets shipped to different resellers, where it is packaged in different containers and sold at different prices. But it’s all the same milk, and that’s why she buys [...]
Divide and Conquer ETFs
April 30, 2012 By
Exchange-traded products (ETPs) are a disorganized mess. The industry needs standardized product groupings so that investors have an easier time sorting and comparing funds. I propose a “first cut” classification method that sorts ETPs into four basic categories. Figure 1 illustrates the four proposed groupings by their investment objective: benchmark, strategy, hedge and active. All [...]
