ETF Prime Archive

The ETF Store names Telford Chief Investment Officer

The ETF Store, Inc. announced today that Thomas Telford has joined the firm as its chief investment officer, effective immediately.

Tom was previously a portfolio manager with American Century Investments for twelve years.  He served as manager and co-manager on a number of equity mutual funds during his time there, including the New Opportunities and Technology Funds.  Most recently Tom was the lead manager of the firm’s flagship Ultra Fund, for which he managed approximately $10 billion in assets.

Joe Massman, Founder of The ETF Store, commented on the hiring, “Tom is an outstanding and seasoned asset manager.”  Massman continued, “Tom joining the firm is a validation of our strategy and reflects the changes occurring within the investment advisory business.  Exchange traded funds have been called the next generation mutual fund and they have benefited investors tremendously.  Now, with Tom’s experience having directly managed tens of billions of dollars, we can fully leverage the power of ETFs for our clients.”

Telford added, “I’m excited to join an innovative investment advisory firm like The ETF Store.  Exchange traded funds have changed the way investors invest, and with The ETF Store I’ll have the opportunity to bring sophisticated investment strategies to retail investors.”

Separately, Telford and The ETF Store announced the formation of Impetus Capital Management, an asset management firm that will provide ETF asset management solutions to institutional, high net-worth and third party investment advisors.

The ETF Store to Present at KCEE Event

The Kansas Council on Economic Education is sponsoring a two-day conference titled “Investing Tools for the Classroom” on Wednesday, June 2^nd and Thursday, June 3^rd.  Kansas Teachers in grades 4-12 are encouraged to attend this virtual conference being held at five of the Kansas Regents Universities:  ESU, FHSU, KSU, PSU & WSU.  Free resources and training will be provided for integrating “Investor Education” into the classroom.  The conference is designed to give teachers a strong comfort level with investing topics and will be especially helpful to current Stock Market Game Advisors, personal finance, economics, business, math and FACS teachers.

As part of this event, The ETF Store’s V.P. of Finance, Nathan Geraci, will be presenting a session titled “Introduction to Exchange Traded Funds” which will provide an overview on what exchange traded funds (ETFs) are, their history, the advantages they can have compared to mutual funds, and the benefits of using ETFs in investment portfolios.

For teachers interested in attending this event, you can register online here.  There is no cost for teachers to attend this conference and continental breakfast and lunch will be provided both days.

International Bond Market Widens Arsenal

In yet another attempt to broaden the vast array of exchange traded funds (ETFs) available to investors, State Street began trading the first ever international corporate bond ETF.

The SPDR Barclays Capital International Corporate Bond ETF (IBND), which tracks the Barclays Capital Global Aggregate ex-USD > $1B: Corporate Bond Index, carries an expense ratio of 0.55% and gives investors exposure to debt that is denominated in local currencies.

IBND focuses on investment-grade corporate bonds and gives exposure to the following currencies: Euro, Australian Dollar, Canadian Dollar, New Zealand Dollar, British Pound, Japanese Yen, Swiss Franc, Swedish Krona and the Danish and Norwegian Krone. Although IBND excludes US Dollar-denominated bonds, it does include bonds issued by US companies which are payable in other currencies. In fact, according to the fund’s prospectus, the US has the largest country weighting at 17.5%, followed by Germany at 16.1% and the United Kingdom at 12.5%.

In regards to sector weightings, IBND is heavily focused on financials, industrials and utilities, which constitute 46.9%, 39.5% and 11.6% of its asset base, respectively. Additionally, the underlying index that IBND seeks to track boasts a yield of 3.05%, which can be expected if IBND tracks its underlying index accurately.

Of the holdings in the newly traded ETF, all of the bonds in the fund are rated Baa or higher, with nearly half of them carrying a rating of A or better and the average maturity for the bonds is 5.3 years with a modified adjusted duration of 4.4 years.

Another notable mention regarding the international bond market is that PowerShares has also filed the necessary paperwork to launch the International Corporate Bond Portfolio (PICB), which will seek to replicate the performance of the S&P International Corporate Bond Index and give exposure to international corporate bonds.

Global X Expands Its ETF Focus

As exchange-traded funds (ETFs) continue to draw assets, innovation remains at the forefront of competiveness.  As a result, ETF provider, Global X, has recently announced the launch of its newest ETFs.

These ETFs include the Global X Aluminum ETF, the Global X Lithium ETF, the Global X Uranium ETF, the Global X Food ETF, the Global X Shipping ETF, the Global X Waste Management ETF and the Global X Fishing ETF – all sectors or industries that are likely to reap the benefits of an expanding global economy and population.

These unique products are nothing new to Global X, who recently introduced the Silver Miners ETF (SIL) and the Copper Miners ETF (COPX), both of which provide direct exposure to companies involved in the mining and production of the respective metals.

The products are expected to enable investors to gain diversified exposure to commodity driven industries and sectors which are traditionally difficult to access and are generally more volatile than traditional equities.

ETFs For Inflation Protection

In an attempt to revitalize a battered U.S economy, the U.S. government implemented stimulus programs and essentially printed massive amount of dollars.  As a result of the massive spending, the U.S. is expected to run record deficits and Moody’s is talking about downgrading the economic powerhouse’s sovereign debt.

Although price hikes have remained relatively low, stirring up an equally disturbing notion of deflation, eventually we will have to pay the price for spending our way out of the worst recession seen in the past five decades.  Inflation is inevitable, but how bad will it get and how do you protect yourself when it does occur?

The Federal Reserve has pledged to continue to keep interest rates at near record lows, indicating that there are subdued inflation trends and stable inflation expectations for the near future.  However, many other economists think that interest rates and prices will have to increase tremendously, eventually igniting double digit inflation.  If the Fed is proven wrong, some common plays to protect against inflation include precious metals and commodities.

Here are a few possibly plays to deal with inflation:

-Gold:  The most well-known hedge against inflation.  SPDR Gold Shares (GLD) is probably the best way to play this because it is actually backed by physical gold bullion.

-Treasury Inflation Protected Securities:  The iShares Barclays TIPS (TIP) is an ETF that invests in inflation-protected securities and adjusts its coupon payments and underlying principle to compensate for inflation as measured by the consumer price index.

-Commodities:  Commodity prices generally rise when inflation is accelerating.  Exposure can be gained through the iShares S&P GSCI Commodity-Indexed Trust (GSG).