Investors who are evaluating exchange-traded funds (ETFs) for their portfolio often compare the expense ratio of multiple funds as a measure of cost. All things being equal, the funds with the lowest total cost will allow you to keep a greater portion of your returns. This is why so many investors have gravitated towards ETFs as a more efficient means of getting diversified exposure to stocks, bonds, and commodities.
The majority of ETFs have ultra-low expenses when compared against actively managed mutual funds, hedge funds, and even insurance products. However, that doesn’t mean that all of them are created equal or that there aren’t a few confusing ETFs with non-traditional fee structures.
One thing I have learned over the course of my career is there are never any shortage of opinions or strategies on how you should be investing your nest egg. Everywhere you look there are hedge funds, mutual funds, ETFs, advisors, newsletters, insurance companies, and other fringe “experts” touting their methods. Read more
Everyone hated energy ETFs last year as plunging oil and natural gas prices eroded valuations of companies engaged in this sector. The weakening demand for global commodities wrought havoc among large oil producers, exploration companies, and even storage conglomerates. Read more
While most investors would likely believe that it’s tougher to uncover relative value in deeply discounted closed-end funds, in my opinion the hardest part of managing a CEF portfolio is knowing when to cut bait and move on. The truth is that there is no clear formula for measuring valuation, meaning that although a fund may be trading marginally above its historical spread to NAV, that doesn’t necessarily mean it’s richly valued. Read more
The market has drifted lower in recent weeks as rising anxiety over a second Fed rate hike looms. I look at some of the top technical and fundamental reasons the market is behaving the way it is. Observations of risk and reward are noted throughout. Charts include: large cap stocks, treasury bonds, oil, energy sector, high yield bonds, REITs, and more. Recorded on May 19, 2016.