Welcome to the ETF Prime Podcast

The Winner of ETF Price Wars? You!

Listen to The ETF Store Show every Tuesday at 9am on ESPN 1510 as we cover everything you need to know about Exchange Traded Funds and the world of investing.

Click here to listen to The ETF Store Show now.

On our most recent radio broadcast, we discussed a Fortune Magazine article titled “The Great ETF Mega-War”, which included several noteworthy data points relating to ETF fund flows and fees.  Regarding fund flows for both mutual funds and ETFs, the article stated:  “The mutual fund industry has seen steady outflows from equity funds in the past few years — $122 billion in the first 11 months of 2012, according to ICI.  During the same period, $100.6 billion moved into equity ETFs”.  Pertaining to fees, the article examined the so-called ETF price war between Vanguard, State Street, and iShares:  “Vanguard isn’t just the cheapest of the three.  Its fees — 0.15% of assets for stock ETFs — are about a quarter of the average 0.56% for equity ETFs, according to data through September provided by Lipper.  (The equivalent figure for mutual funds is 1.29%)”.

We explored some of the key factors driving investors out of equity mutual funds and into equity ETFs, not the least of which is obviously the lower ETF fees highlighted in the second point above.  We further noted that the takeaway here is not so much that Vanguard ETFs are perhaps cheaper than some of the other ETFs, but that the Vanguard equity ETFs average almost 1.15% less than the average equity mutual fund.  We also explained how even with more investors turning bullish in January with the S&P 500 up over 6%, investors still preferred to access US equities through ETFs (with this additional food for thought from Reuters:  “ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor”).

In addition to covering the Fortune Magazine article, we also fielded several listener questions including an interesting one on the Health Care Select SPDR ETF (ticker XLV).  In our weekly market update, we discussed the Dow Jones Industrial Average finally crossing over the 14,000 mark for the first time since October 2007 and what that could mean for bonds.  Finally, in our ETF spotlight segment, we highlighted an extremely low cost, broad based US equity ETF, the Schwab U.S. Broad Market ETF (ticker SCHB), and compared this ETF to a mutual fund behemoth – the American Funds Growth Fund of America.

USCF CIO John Hyland on Commodity ETFs

Listen to The ETF Store Show every Tuesday at 9am on ESPN 1510 as we cover everything you need to know about Exchange Traded Funds and the world of investing.

Click here to listen to The ETF Store Show now.

On our most recent radio broadcast, John Hyland, Chief Investment Officer for United States Commodity Funds, joined us to discuss investing in commodities and commodity exchange traded products.  At The ETF Store, we believe commodities can play a very important role for most long-term investors as part of a well-diversified portfolio.  Commodities have traditionally served as an excellent inflation hedge and can potentially offer substantial portfolio diversification benefits.  ETFs have changed the game for investors by offering easy and cost effective access to commodity exposure that, in the past, would have typically been reserved for sophisticated, wealthy, and/or institutional investors.  ETFs have essentially “democratized” commodity investing.  John offered his thoughts on commodities as an investment and discussed the potential benefits of investing in commodities through exchange traded products.  John also delved into some specific commodity sectors that currently seem appealing.

In our weekly market update, we discussed the 35%+ decline in Apple (AAPL) and explained how an ETF such as the Powershares QQQ (QQQ) could be a better way to go for diversified exposure to Apple.  We also explained the so-called “earnings cliff” (no – not the “fiscal cliff”) and how it could potentially impact your investments.  Finally, in our ETF spotlight segment, we highlighted a particularly interesting broad based commodity ETF, the United States Commodity Index Fund (ticker USCI), and described how this ETF differs from some of the other broad based commodity exchange traded products.  We also compared this ETF to one of the largest commodity mutual funds.

Happy 20th Birthday, ETFs!

Listen to The ETF Store Show every Tuesday at 9am on ESPN 1510 as we cover everything you need to know about Exchange Traded Funds and the world of investing.

Click here to listen to The ETF Store Show now.

On our most recent radio broadcast, we celebrated the 20-year anniversary of the launch of the first ever U.S. listed exchange traded fund – the SPDR S&P 500 ETF (ticker SPY).  While many investors tend to view ETFs as a relatively new innovation, ETFs have actually been around for twenty years thanks to the largest and most popular ETF, SPY, which was created on January 22^nd, 1993.  Since that time, ETFs have grown into a $1.4 trillion monster with no signs of slowing down.  Stoyan Bojinov from ETF Database joined us on the program to offer his thoughts on “ETFs at 20” and also discuss what lies ahead for the industry over the next twenty years.  We explained how SPY really encapsulates why investors are gravitating towards passively managed ETFs, while at the same time shunning actively managed mutual funds – namely because ETFs tend to be cheaper, more tax efficient, offer greater transparency, and can minimize the risk of underperformance that has plagued so many actively managed mutual funds.  We also discussed an excellent interactive tool that ETF Database created in honor of the 20-year anniversary of SPY which shows the top ten components of the S&P 500 index going all the way back to 1980.  While the chart is certainly a stroll down memory lane, it can also offer some very important investing lessons as we described on the show.

In our weekly market update, we discussed some of the highlights from our recently released quarterly market commentary including our outlook for global equities and why individual investors have essentially underperformed every major asset class over the past twenty years.  Finally, in our ETF spotlight segment, we examined a country specific ETF, the SPDR S&P China ETF (ticker GXC), and explained where China might fit in your investment portfolio.