Monthly Archives: December 2012

iShares increases expenses on 40 ETFs

In rather surprising news, iShares has filed with the SEC (this is standard practice) to increase fund expenses on 40 some ETFs in the lineup for 2013. Despite tremendous asset gathering from certain products (including the extremely popular $EEM), iShares is increasing investor expenses roughly 2-4% across many products. This fee increase is how iShares […]

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CalPERS makes a big switch to passive investing in 2012

Pensions & Investments reported earlier this year that CalPERS is moving $500M of global fixed income investments to passive in-house strategies, saving millions in fees and boosting performance. The decision was reached after five-year rolling periods for internally managed passive strategies outperformed outsourced active management for traditional equity investments. According to board member J.J. Jelincic, […]

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A look at a fund company’s attempt to defend active management

Earlier this month U.S. Global Investors posted a piece titled “A Face-Off Between Passive and Active Investing” defending their sector-specific actively managed funds by comparing their funds’ recent performance to a variety of ETFs.  You can read the full piece here: http://www.usfunds.com/investor-resources/investor-alert/a-face-off-between-passive-and-active-investing The article is this fund company’s attempt to convince readers that active management is […]

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Commission-Free ETFs could raise costs for investors

In relationship to this post about the high cost of No-Transaction-Fee platforms, Investment News reports that Schwab is creating a similar platform for ETF investors. Schwab is working hard to capitalize on the explosion of popularity ETFs have seen in the past few years.  Apparently no longer satisfied with $8.95 trade commissions  they are pushing for […]

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The Shortcomings of “Socially Responsible” Investing

If there is anything the financial services industry is good at, it’s generating product that investors will buy.  Socially responsible investments play to many investors concerns about whether or not their portfolio is aligned with their values. Below is a rundown on why these products can be problematic for investors. 1) The first problem with […]

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Mutual Fund Investors Get Clobbered with 2012 Tax Hit

As the end of the year approaches, many mutual fund investors could be facing significant tax liabilities from their investments.  Mutual funds are required by law to pay out realized capital gains to investors in the form of (typically annual) distributions. As usual, some funds are paying significant capital gain distributions to investors, many above […]

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Considering the Implications of a Reversal of DOMA & Prop 8

On Friday 12/7/2012 the United States Supreme Court announced that it would accept cases from New York and California to consider the constitutionality of certain sections of 1996’s Defense of Marriage Act (DOMA), along with California’s Prop 8. California’s Prop 8 is a state constitutional amendment that defines marriage between one man and one woman. […]

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Hijacking Investor’s Economies of Scale

Over the past 50 years the financial services industry has exploded.  Mutual funds have grown astronomically and there is an investment advisor or broker on every corner.  Retirement assets have shifted from being under institutional control of a pension plan to 401(k) vehicles and other defined-contribution plans, putting the control of assets in the hands […]

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Why FINRA’s Pending Bonus Disclosure Rule is Important

FINRA, the broker-dealer’s self-regulatory agency, is considering a new set of rules that would include forcing brokers to disclose bonuses they receive for jumping firms. It is a not too uncommon practice for a broker with a major wirehouse (let’s say Merrill or Morgan Stanley or JP Morgan) to take their clients to a different […]

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