All Things ETF

Out looking for new products today. Guggenheim Investments has a new class of ETFs called Pure Style ETFs .  The funds are based on the concept that the, "potential drawback of actively managed mutual funds and traditional cap‐weighted style indices is a lack of style purity. This may undermine portfolio optimization and Guggenheim Pure Style ETFs seek to address this shortcoming with a unique approach, offering only “pure” exposure to value and growth investing."   Guggenheim lists about 7 funds in this new class of funds. If you would like more information on how this class of funds can help you grow you wealth, call us at 1-866-801-3359 or visit our website at UCS Financial Advisors and fill out and submit the secured form on our Wealth Products page requesting more information in the comments section of the form. **Please note we are in no way affiliated with Guggenheim Investments or any of its funds or investments, nor are we paid to recommend a...

By: Rick Walter What is a benchmark and how does it help you or your ETF Fund? A benchmark is a standard against which the performance of a security, mutual fund or investment manager can be measured. Generally, broad market and market-segment stock and bond indexes are used for this purpose. For example, "when evaluating the performance of any investment , it's important to compare it against an appropriate benchmark. In the financial field, there are hundreds of indexes that analysts use to gauge the performance of any given investment including the S&P 500 , the Dow Jones Industrial Average , the Russell 2000 Index and the Lehman Brothers Aggregate Bond Index ." All ETFs are built with a benchmark in mind . Does this make ETFs easier to construct and market? Maybe, according to the total ETF funds chart I have constructed show ETFs proliferating at break neck speed.

By Rick Walter If you have not reviewed the ETF basics posts, click the ETF Shelter labels and start from the beginning. Remember, as an investor you are purchasing ETF shares in the secondary market. You are not buying creation units or any of that. Of course at some point in time I would like to start an ETF Fund and you are welcome to join my fund, then we can all buy creation units and makes lots of money hedging. However we are not there yet. Before you choose an ETF , you may want to start with some type of asset allocation model for yourself, which is the practice of dividing resources among different categories based on your risk tolerance, goals and investment horizon; Common classes for asset allocation models are Equities (stocks) , Fixed income (bonds), and Cash and cash equivalents (treasury securities); other classes of assets such as real estate are also included but can be defined in one of the three categories above. Your asset allocation model should be bui...

By Rick Walter An ETF , like any other type of investment company, will have a prospectus. All investors that purchase Creation Units receive a prospectus. Some ETFs also deliver a prospectus to secondary market purchasers. ETFs that do not deliver a prospectus are required to give investors a document known as a Product Description, which summarizes key information about the ETF and explains how to obtain a prospectus. All ETFs will deliver a prospectus upon request. Before purchasing ETF shares, you should carefully read all of an ETF ’s available information , including its prospectus. The websites of the New York Stock Exchange , American Stock Exchange and NASDAQ provide more information about different types of ETFs and how they work. An ETF will have annual operating expenses and may also impose certain shareholders fees that are disclosed in the prospectus. Currently, all ETFs seek to achieve the same return as a particular market indexes . Such an ETF is similar t...

By Rick Walter Investors who want to sell their ETF shares have two options: (1) they can sell individual shares to other investors on the secondary market, or (2) they can sell the Creation Units back to the ETF. In addition, ETFs generally redeem Creation Units by giving investors the securities that comprise the portfolio instead of cash. So, for example, an ETF invested in the stocks contained in the Dow Jones Industrial Average (DJIA) would give a redeeming shareholder the actual securities that constitute the DJIA instead of cash. Because of the limited redeemability of ETF shares, ETFs are not considered to be—and may not call themselves— mutual funds ."

By Rick Walter "Exchange-traded funds, or ETFs , are investment companies that are legally classified as open-end companies or Unit Investment Trusts (UITs) , but that differ from traditional open-end companies and UITs in the following respects: ETFs do not sell individual shares directly to investors and only issue their shares in large blocks (blocks of 50,000 shares, for example) that are known as " Creation Units ." Investors generally do not purchase Creation Units with cash. Instead, they buy Creation Units with a basket of securities that generally mirrors the ETF ’s portfolio. Those who purchase Creation Units are frequently institutions. After purchasing a Creation Unit, an investor often splits it up and sells the individual shares on a secondary market. This permits other investors (You) to purchase individual shares (instead of Creation Units). I have had limited success buying and selling ETFs earlier this year. Many of them are way-y-y down. Many ETFs a...