Welcome to the ETF Prime Podcast
One of the “most helpful plain-English resources for investors who want to demystify exchange-traded funds” – Bloomberg Businessweek
Latest Episode
Rethinking Sector ETFs & Baron Capital’s ETF Debut
Michael Cohick, Director of Product Management at VanEck, breaks down the firm’s lineup of TruSector ETFs and how they aim to address tracking error caused by regulatory diversification limits – constraints that can force traditional sector funds to underweight the largest companies in their benchmarks. Matt Camuso, Head of ETF Solutions at Baron Capital, discusses the firm’s recent entry into the ETF space and outlines its distinctive approach to actively managed growth equity investing, including the Baron First Principles ETF (RONB).
About the Podcast
ETF Prime is hosted by Nate Geraci. Learn how to make ETFs a part of your investment portfolio as Nate spotlights individual ETFs and interviews experts from across the country. ETF Prime is available on Apple Podcasts, Android, Spotify, and most other major podcasting platforms. Specific guest interviews can be accessed by visiting the ETF Expert Corner.
Recent Episodes
Meb Faber Talks Fee Compression, Spotlights Two Cambria ETFs
Meb Faber, Founder & CIO at Cambria Investment Management, offers his perspective on ETF fee compression and spotlights the Cambria Global Value ETF (GVAL) and Cambria Tail Risk ETF (TAIL). Nate & Jason discuss Franklin Templeton’s recent move into low cost, passive ETFs and explain the ETF implications of CME Group’s decision to launch bitcoin futures.
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WSJ vs. Morningstar: The Issue with Star Rankings
A recent Wall Street Journal article, “The Morningstar Mirage” questioned the usefulness of Morningstar’s popular star rating system for mutual funds. Nate & Conor go in-depth on this topic, explaining why a lack of consistency in mutual fund manager performance is at the heart of the issue. Steven Schoenfeld, Founder & Chief Investment Officer of BlueStar Indexes, spotlights the BlueStar TA-BIGITech Israel Technology ETF (ITEQ) and describes Israel’s vibrant tech ecosystem.
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5 Questions To Ask Your Advisor About ETFs
The following was authored by Hollie Fagan, Head of BlackRock’s Registered Investment Advisor business.
More and more investors are looking at ETFs and wondering if they should incorporate them in their portfolios. Talking to your financial advisors about ETFs is a good start.
Exchange traded funds (ETFs) have joined mutual funds and individual stocks as mainstream investment tools, and their popularity is only growing. The past year saw record flows into stock and bond ETFs. Today, one in four U.S. investors owns ETFs, according to BlackRock’s ETF Pulse survey; half of all investors plan to purchase them in the next 12 months.
Whether you’re already an ETF investor or have just been hearing about them, you may be curious to know more or understand them better. This is a great conversation to have with your financial advisor.
Here are five questions (and brief answers) to help you get started.
1. What’s the difference between an ETF and a mutual fund?
ETFs and mutual funds have a lot in common: They’re both diversified, managed bundles of securities that are divided into shares, and bought and sold by investors. ETFs are traded on an exchange just like a stock and usually track an index; however, they’re also structured somewhat differently. These features mean they’re typically cheaper to own than mutual funds, through lower annual management fees and potential tax efficiency. For more information on the differences between ETFs and mutual funds, click here.
About the survey
The BlackRock 2016 U.S. ETF Pulse survey was conducted from September 12–26, 2016, by TNS, an independent research company. The survey interviewed over 1,000 individual investors and 400 financial advisors, from nationally representative online samples of household financial savings/investment decision makers age 21–75, with $100K+ in investable assets and aware of ETFs; and financial advisors age 21–75 with $25MM+ in assets under management.
Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this post is at the sole discretion of the reader.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.
Investment comparisons are for illustrative purposes only. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products’ prospectuses. When comparing stocks or bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual stocks or bonds.
Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders. There can be no assurance that an active trading market for shares of an ETF will develop or be maintained. Diversification and asset allocation may not protect against market risk or loss of principal.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.
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Head of U.S. iShares Goes In-Depth on ETF Growth
Martin Small, Head of U.S. iShares, goes in-depth on continued record ETF growth, explaining key drivers and potential implications. Nate & Jason discuss last week’s ETF fee cuts from StateStreet and spotlight the recently launched iShares Russell 1000 Pure U.S. Revenue ETF (AMCA).
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3 Ways To Help Maximize Your Portfolio’s Tax Readiness
The following was authored by Hollie Fagan, Head of BlackRock’s Registered Investment Advisor business.
When it comes to taxes and investing, it’s all about the end game—the less you pay now, the more you’ll keep working toward your long-term goals.
As the final months of 2017 gallop to a close (wasn’t it just Memorial Day?), many of us are thinking about taxes and looking for ways to reduce the bill from Uncle Sam.
Your investment portfolio is an important part of that review. A recent BlackRock survey found that 44% of investors say taxes are the costs that matters most to them (Source: GfK, BlackRock, 8/31/2017). There’s a good reason for that: Taxes can take a big bite out of returns.
To that end, here are three tax-smart tips to think about as you prepare for year-end:
1. Seek to limit capital gains distributions
When a fund manager sells a security at a profit, the gain can come back to you as a taxable distribution, even if you don’t sell your fund shares or the fund itself posts a loss. The impact to your bottom line can be significant, as the example shows below. This year may offer some particularly unwelcome surprises, given the stock market’s strong performance.
Investments to consider: Try to reduce or even eliminate capital gain distributions in your taxable accounts. One way to try to do that is with exchange traded funds (ETFs). Because ETFs seek to track the market, they typically turn over securities less frequently than strategies seeking to beat the market; this lower turnover may result in lower capital gains; these vehicles can also be structurally tax efficient. In fact, there are ETFs that have never distributed a cap gain.
2. Be thoughtful about investment income
The other taxable distribution to look out for is the dividend. Certain fund dividends (think taxable bonds and REITs) may be subject to ordinary income tax rates. But there are several ways to possibly lighten the burden. One is location: Consider allocating your least tax-efficient investments to the most tax-friendly accounts. Another consideration is timing: If you’re planning to buy shares, pay attention to when your fund pays out dividends (known as the ex-dividend date). Because the share price may drop temporarily after payment, you could find yourself not only with a capital loss but owing taxes on the dividend.
Investment to consider: The interest from municipal bonds is generally free from federal taxes and often state taxes as well, depending on your state or where you file—savings that may potentially translate into higher returns. And dividends from stock funds (including preferred stocks) are typically considered “qualified income;” although you’ll owe taxes, they may be at the lower capital gains rate.
3. Ask for help
Taxes are complex and most of us would prefer to pay as little of them as possible. Your financial advisor or tax professional can bring crucial insight and perspective into the process. While the BlackRock survey found that 44% of investors say their advisors actively mitigate taxes in their portfolios, 37% don’t know whether they do so (Source: GfK, BlackRock, 8/31/2017). The best thing to do is…ask and learn.
Taxes are only one facet of an investment plan. Your portfolio should ultimately reflect much more: your timeframe and objectives, the risk you’re willing to bear for the performance you want and the best value for your money—including how much you pay in taxes.
Learn more about ways to build tax efficiency into a portfolio.
Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any of these views will come to pass. Reliance upon information in this post is at the sole discretion of the reader.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.
This post contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.
This material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.
Investment comparisons are for illustrative purposes only. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products’ prospectuses. When comparing stocks or bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual stocks or bonds.
Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
©2017 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.
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