Obviously those funds would break a lot of new ground in terms of access but they are just filings for now. I always circle back to to WisdomTree's filing for a fund for just about every currency on the planet only to list a small number of them. Obviously there are expenses and risk with listing a new ETF but the filing for dozens to only list a few exists and so we'll just have to wait to see what they list.
I hope all of these do list sometime soon. One potentially valid way to navigate the next ten years or longer will, IMO, be to select a basket of country funds comprised of destinations with different fundamental attributes. This would require watching sector weights under the hood of such a basket (the reason I prefer to go narrower) but still valid nonetheless.
The new AdvisorShares Dent Tactical ETF (DENT) has started to trade and drawing a fair bit of negative press. There is criticism over the expense and the vague nature of what the fund will do. Heather Bell expressed concern about the expense setting a bad precedent because most ETFs are cheap.
I'm not sure what the beef here is. DENT is an actively managed fund that happens to use the ETF wrapper. That it is expensive may or may not matter, just noting the expense in nominal terms is incomplete. If the fund were to net its holders 1000 basis points per year ahead of the S&P 500 then I suspect investors would gladly pay twice the 1.5% the fund is charging.
Larry Swedroe spells out why great returns from the fund could be very unlikely and after reading Swedroe's thoughts about the fund I would avoid it if it were free. I agree with Ron Rowland (quoted by Heather) that the fund will soon make his ETF Deathwatch list but expense, all by itself, should not be the primary determinant for a specialized fund.Continuing with the retirement theme from a couple of days ago Yahoo Finance re-ran an article from Marketwatch about the 50 best employers for people over 50 years old according to AARP. I found it interesting that nine of the 50 were colleges or universities (not including Corinthian Colleges). There were also a couple government agencies on the list (state and federal).
In many of those best places to retire articles they talk about taking classes and such and such college nearby. Maybe the focus should be working at such and such college nearby?
The picture? No reason other than it is neat.
3 comments:
"That it is expensive may or may not matter, just noting the expense in nominal terms is incomplete."
This statement is simply not true. It has been shown time and time again that the best indicator for an active fund's performance is its expense ratio. The higher the expenses, the lower the performance. There may be exceptions of course, but finding them in advance is the challenge.
There are so many funds out there that try to add alpha through active management. It seems like it would be more useful to see more absolute return funds that are much less volatile than the global equity market while producing equity like returns. That would really be something that retirees and the general public could use.
One could use alpha to increase risk adjusted returns like an equity long/short fund. Alternatively one could just capture beta but use better portfolio science than the out-dated Modern portfolio theory provides to smooth returns.
I am not even a professional yet I have an approach that is much better than the market-neutral or absolute return mutual funds that are out there * but I don't know much about the business of launching an ETF or mutual fund. (* PDMAX looks like it might end up being comparable for the lower level of return it seeks)
I guess maybe there is more demand for discredited alpha seeking managers that have lost their investor's money in the past than for boring and dependable money making.
Roger,
I'll hazard a guess as to what is meant by "Emerging Africa". From my reading about "frontier markets", there seems to be a tendency to mention "MENA" (Middle East, Northern Africa) as a single market.
Perhaps this proposed ETF will drop the Middle East exposure, and focus solely on Africa....just a guess on my part.
Old Trader
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