Exchange-traded funds, or ETFs, have become increasingly popular among investors because they're more liquid and tax efficient than mutual funds and give them exposure to stocks, bonds and commodities they otherwise might not be able to access.Explore our rich collection of content by joining the discussion about particular articles here.
However, it is an absolute certainty that if interest rates on newly-issued US Treasury bonds of the same duration rise, those bonds will lose resale value. Where is that disclosed and why do so many financial advisors believe that that will not happen because interest rates have not risen from historic lows in the pas 28 years.
It is also an absolute certainty that a US Treasury bond FUND which continues to extend its average maturity each time a bond matures will lose MORE.
Where is the disclosure of interest rate risk in US Treasury bonds and, for that matter, where is Congress' disclosure of the very real credit risk at which our President and Congress is placing America's future creditworthiness by playing "chicken" with the rating agencies?
ETFs are subject to registration with the SEC which does a fine job of reviewing prospectuses.
Part of the speculation over ETFs' use is "experts" not differentiating between how individuals use ETFs and how professionals use ETFs. Rydex, ProFunds and Direxions offer nearly all of the inverse ETFs and leveraged ETFs. They servie a unique market and other ETFs should not be asked to carry the speculation about how investors who don't understand ETFs think investors use ETFs.
Let's acknowledge that passive buy-and-hold marketing of a limited menu of often-mediocre mutual funds has served retirement savers poorly.
I find it interesting that the financial press is always willing to publish the announcement of a new fund with an investment objective it has never achieved in real life and changes in portfolio managers and seldom writes an article on funds that have successfully managed high-return low-risk funds. Performance doesn't seem to be of interest except to criticize in the short-term.
- Joined: Tue Apr 07, 2009 2:29 pm
- Bradly T.
- Joined: Mon Mar 30, 2009 3:35 pm
- Yes, to Another Wirehouse or Regional Firm.
- Yes, Considering Independence.