Not really but iShares filed for an ETF that is along the lines of a concept I've written about many times. The fund, if it ever lists, will be the iShares MSCI All Country Asia Information Technology Index Fund. This is similar to the Scandinavian Bank ETF idea that I've been writing about for quite a while now.
The various contract manufacturers in Asia and OEMs are a valid way to incorporate the tech sector into narrow based portfolio, indeed many of these names are very active on the local markets and weighted heavily in their respective country funds. Not all specialized funds have an audience of course but some have meaningful volume due in my opinion to the realization that broad indexing has not "worked"in many years and may not work for a while to come requiring people to go narrower and be more tactical.
Country funds are democratizing to a point as are sector funds, I think funds that combine sector and country or region enhance that all the more. I also think the various emerging market sector ETFs have long term utility as well.
As a quick update, the ETF that our firm will be managing is coming along. There are various tasks that need to be completed before the actual filing and those are getting done and it appears to be on track time-wise in terms of the expectation set out at the start of the process. Unfortunately, focusing the fund on greasy wool arbitrage won't work out as we had hoped (humor attempt). I will try to update as the process moves along.
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14 comments:
What will be the expense ratio of your new ETF?
Roger,
You want lots of target funds for good investment choices. I do not totally agree, but I respect your position and your high degree of integrity.
Mutual funds have been putting out lots and lots of funds over the decades and keeping the above average one open and closing or merging the poor funds so they go away.
By analogy the etf marketers know they will have to close under performers in the future and tout the above average performers. Dumb way to invest, but that is how the public invests.
So I am not so sure etfs going to market are as altruistic as you are. they have to just throw stuff out there and realize a lot will not catch on. So the following year they will come up with a bunch of new silly funds and on and on. To a large extent the public makes them do this, but still they just want to sell etfs whether you make money or not. It is their business.
SEG
I'm looking at a very well diversified portfolio of 26 entities diversified by country and sector. I'm seeing an extraordinary degree of correlation this past month-approaching 100%. What's up with that?
There is evidence that an inverse relationship between a fund's expense ratio and performance exists. The higher the ratio, the worse the performance (at least for the investors)
SEG, right on with your comments. The proliferation of ETFs are about the managers making money.
What ever became of T that blogged "investing from the right"?
He wrote sporadically and I know you agreed with some of his philosophy.
Phil I think T is helping the 99% crowd ;)
Some markets offer good and/or non-correlated returns -- depends on the efficient horizon of a given portfolio of course -- but are difficult to access. Well designed ETP's that do a good job w/ that are worth the fee.
Anon 8:00AM, increasing asset correlation is most likely associated with the "risk on, risk off" pattern we've been experiencing for awhile -- e.g., http://tinyurl.com/3cr4g2e and http://tinyurl.com/3l2st84 -- risk now is "on."
Managing fees to a minimum is usually very positive over time.
Every one says the increased fees are worth it for well managed funds that out perform. The truth is most rarely continue to out perform in the future.
Of course those in the industry will always come up with positive arguments for people to pay higher fees.
Let's start the Low-Bridge-Everybody-Down ETF ... it would cover canals -- Panama, Suez, Welland, stuff in Europe and of course, the Erie Canal.
Laugh all you want, but some money-running firm probably will do it.
BillM
as an FYI anything I have said up to this point about the ETF was said because I could say it.
Anything not said thus far has not been said because it is not ok to discuss yet.
The process is lengthy and specific and obviously we are going to adhere rigidly.
Roger,
Regarding comments, pre-launch, about the ETF you're developing. I doubt most readers understand the compliance issues surrounding issuing any security. Perhaps you could revisit those very strict and enforced rules.
actually Phil I know very little in terms of the rules. For now I know it is ok to acknowledge we are trying to bring an ETF to market and that once we file I don't think I can even say that but I'm not sure
What is your main goal in trying to bring an ETF to market? Altruism? Extra personal income? Both?
This post was the first I read of roger being involved in a etf in the future.
My biggest disagreements with rogers approach has usually been that it is easy for him to do but following his plan at home would be difficult for most individuals.
I think rogers group is doing this to make money not altruism like a previous bad comment.
But, I would rather buy an etf run by a conscientious individual I respect like roger than many firms that just keep on opening poorly designed "new" etfs.
I still like larger etfs, but an etf eliminates the biggest criticism of how do most people implement some of rogers more complex investment methods at home. the etf would make it easy as all they need to do if they have faith in his approach is buy the etf.
I heartily endorse this idea and only hope the implementation is as good as the idea of launching the etf.
SEG
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