It was only a matter of time. X With ETFs that track broad equity indexes trading more than most individual stocks, and investors pouring money into fixed-income funds, it probably should come as no surprise that someone decided to marry the two. We give you: the S&P 500 Index bond fund. The ProShares S&P Bond ETF (SPXB) started trading on Thursday. The latest fund from $29 billion ProShares — the 10th-largest issuer of ETFs and specialist in leveraged and inverse funds — aims to give investors exposure to the most liquid and high-quality bonds issued by companies in the S&P 500, according to the fund's prospectus. While broad market trends continue to push money into fixed-income ETFs, some investors are still hesitant to trust debt instruments that trade like stocks, according to Michael Sapir, chief executive officer of ProShare Advisors, the parent of ProShares funds. The familiarity of the S&P 500 name, though, could now help lure people off … [Read more...] about Want To Invest In Bonds Issued By S&P 500’s Apple, Others?
Jim Ross, known as one of the fathers of exchange traded funds, says leveraged ETFs aren't a viable long-term investment vehicle, and his company, State Street Global Advisors, will never sell them. X Ross, who was part of the team that designed the first U.S. ETF, the SPDR S&P 500 (SPY), at State Street in 1993, says securities that offer souped-up returns are just too dangerous for the average person. Leveraged ETFs need "extreme education for the end investor to be using them," Ross, executive vice president of the money manager and chairman of its global ETF business, said in an interview during a visit to Tokyo. At State Street, "we do not see a place" for them. The funds are designed to pay some multiple of the index they track, usually twice or three times the daily return — or its inverse. While that enables investors to make bigger profits, it also increases their risk of losses, prompting criticism that investing in them is akin to gambling. IBD Newsletters … [Read more...] about ETF Pioneer Warns About The Dangers Of Leveraged Funds
Share This Story! Let friends in your social network know what you are reading about Facebook Email Twitter Google+ LinkedIn Pinterest Are you used to market volatility yet? Barone Today’s volatility is symptomatic of the confusion and uncertainty now prevalent, says columnist Robert Barone. Sent! A link has been sent to your friend's email address. Posted! A link has been posted to your Facebook feed. Join the Conversation To find out more about Facebook commenting please read the Conversation Guidelines and FAQs Subscribe Today Log In Subscribed, but don't have a login? Activate your digital access. Robert Barone Published 9:36 p.m. PT April 25, 2018 | Updated 9:37 p.m. PT April 25, 2018 CONNECT TWEET LINKEDIN COMMENT EMAIL MORE Recently, equity market technical indicators have soured. Since its January peak, the markets have twice tried to re-establish the uptrend, only to falter each time. The fact … [Read more...] about Are you used to market volatility yet? Barone
The prime suspects in February's global rout may be at it again. X Inverse exchange traded funds — which use leverage to bet against stocks and volatility indexes — have seen trading activity skyrocket to ominous levels as markets whipsawed last week. In fact, turnover has only been higher two other times since the financial crisis: in 2016 during a correction and in February when a surging Cboe Volatility Index forced short funds to unwind. The difference this time is that inverse leveraged technology ETFs are at the center of the action, rather than volatility products. There's nothing necessarily odd about a pickup in volume during periods of market stress. Volatility begets ETF trading as investors hedge macro events using broad exposure. IBD Newsletters Get exclusive IBD analysis and action news daily. SIGN UP NOW! IBD Newsletters Get exclusive IBD analysis and action news daily. Market Prep Tech Report Please enter a valid email address … [Read more...] about Exotic ETF Trading Surges Again As Market Whipsaws
The problem with investing is you can lose money — and sometimes a lot of it. X Investors in VelocityShares Daily Inverse VIX Short Term Exchange-Traded Note (XIV) learned that the hard way. The product blew up and has since been liquidated, leaving investors with big losses. Now, they're suing Credit Suisse Group (CS), the note's issuer, and Janus Index & Calculation Services, the publisher of the note's intraday indicative value and closing indicative value. XIV was one of 19 exchange-traded products that tracked the Cboe Volatility Index, better known as the VIX. XIV wasn't an ETF, but an exchange-traded note (ETN). ETNs don't hold underlying securities, like stocks or bonds. They're unsecured debt instruments issued by a bank that promises to pay the performance of an index. XIV promised to pay the inverse of the VIX. If the VIX went down, XIV would go up that amount, and vice versa. It did this by buying and shorting VIX futures. XIV had become popular … [Read more...] about Investors File Lawsuit After Losing Money In XIV Meltdown