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John Spence

Morningstar Study Reinforces the Importance of Fund Costs

by John Spence
Wednesday, February 27, 2002

Chicago fund-tracker Morningstar wrapped up a study that examines the importance of fund costs on an investor's bottom line. Although the study looked only at actively managed domestic equity funds, the results should provide further encouragement to ...Read More


  • State Street and Unico to Introduce ETFs in Germany

    by Staff — Monday, February 25, 2002

    In a nod to the growing popularity of exchange-traded funds in Europe, Frankfurt-based Unico Asset Management announced that Boston-headquartered indexing behemoth State Street Global Advisors will manage and ...Read More

  • Websites Roll Out More Snazzy Tools

    by Staff — Friday, February 22, 2002

    With good reason, all the talking heads are buzzing about asset allocation and diversification these days, and more Internet tools geared to do-it-yourself investors are cropping up. Three new gizmos of ...Read More

  • John Spence

    Bogle Calls for Federation of Long-Term Investors

    by John Spence — Thursday, February 21, 2002

    Like Woodrow Wilson laying out his vision of a League of Nations after World War I, Vanguard founder John C. Bogle has called for a "Federation of Long-Term Investors" in the wake of the late 1990s speculative ...Read More

  • News Roundup

    by Staff — Tuesday, February 19, 2002

    The Vanguard Group today launched the Single 5 fixed annuity, which will be underwritten by Jefferson Pilot LifeAmerica Insurance Company. The new annuity offers a guaranteed fixed rate of return over the ...Read More

  • KLD and Nasdaq Launch New Socially Responsible Index

    by Staff — Wednesday, February 13, 2002

    Think Nasdaq "cubes" for investors with a conscience. Boston-based KLD Research & Analytics and the Nasdaq stock market introduced a new socially responsible index of companies trading on the tech-heavy ...Read More

  • Larry Swedroe

    Explaining The Value Premium

    by Larry Swedroe — Monday, February 11, 2002

    The historical evidence is that there is a very strong and persistent value premium. From 1964 to 2000 large value stocks outperformed large growth stocks 14.5 percent to 11.1 percent, and small value stocks ...Read More

  • News Roundup

    by Staff — Monday, February 4, 2002

    A new study by Lipper estimates mutual fund shareholders coughed up $11 billion in shareholder-servicing expenses in 2001. According to Lipper, the average shareholder pays 2.8% of assets for services like ...Read More

  • Will McClatchy

    Active Fund Trading Costs Remain High

    by Will McClatchy — Tuesday, January 22, 2002

    Many individual investors believe that professionally managed funds have a trading cost advantage over them, but this is not the case. A recent study suggests that smaller volume traders have gained the most ...Read More

  • John Spence

    SEC Reviewing Actively Managed ETFs

    by John Spence — Thursday, January 10, 2002

    Not one of the currently 102 exchange-traded funds (ETFs) listed in the United States holding over $70 billion of assets in their coffers is actively traded. All are linked to equity benchmarks from the ...Read More

  • Vanguard Extended Market ETF Launches

    by Staff — Friday, January 4, 2002

    Vanguard Extended Market VIPERs, the exchange-traded fund to track the Wilshire 4500 Completion Index, will begin trading on January 4, 2002, on the American Stock Exchange under the symbol VXF. Vanguard ...Read More

  • Mind Your Q's

    by Max Issacman — Friday, January 4, 2002

    By far the most popular exchange traded fund (ETF) is the one that tracks the Nasdaq-100 Index, symbol QQQ. It has been this way since the Qs made their first appearance on March 10, 1999. On that day alone ...Read More

  • Larry Swedroe

    Never In Doubt, Often Wrong

    by Larry Swedroe — Wednesday, January 2, 2002

    Economists, if they are smart, learn to never make forecasts, especially about the future. If they have to make a forecast, they learn to never give a number. And, if they have to give a number, they learn to ...Read More

  • John Spence

    News Roundup: Amex and Bank of New York

    by John Spence — Monday, December 31, 2001

    Investors who use options to hedge portfolio risk got some welcome new tools for the chest. This week the American Stock Exchange (AMEX) began trading options on six iShares managed by Barclays Global ...Read More

  • Will McClatchy

    Index Tracking is a Secondary Goal

    by Will McClatchy — Sunday, December 23, 2001

    As investors examine year-end performances of their index funds, one measure they should not focus on too closely is tracking error. Keeping a portfolio reasonably close to its intended index is desirable, but ...Read More

  • Will McClatchy

    Glimpse of "Convergence to Efficiency"

    by Will McClatchy — Thursday, December 13, 2001

    A new study "Evidence on the Speed of Convergence to Market Efficiency" by Prof. Richard Roll of UCLA and colleagues demonstrates just how quickly competition squeezes out easy profits and offers glimpses of ...Read More

  • Tax Loss Selling Using Exchange Traded Funds

    by Russ MacKay — Tuesday, December 11, 2001

    Tax loss selling has been an effective tax management tool used by savvy investors and portfolio managers for years. The concept is quite simple. You sell investment(s) that are in a loss position, and apply ...Read More

  • Larry Swedroe

    The Enron Debacle: Lessons To Be Learned

    by Larry Swedroe — Friday, December 7, 2001

    In December 2000, with its stock trading at a peak of $85 per share, Enron had a market capitalization of over $60 billion, making it one of the largest U.S. companies. Less than one year later, with the stock ...Read More

  • Will McClatchy

    Bogle Cautions Indexers on ETF Speculation

    by Will McClatchy — Wednesday, December 5, 2001

    Vanguard's founder denounced the speculative appeal of exchange traded funds before the largest annual US gathering of indexing faithful, who took the message to heart but felt that it understated how ...Read More

  • Explaining Stock Returns: A Literature Survey

    by James Davis — Saturday, December 1, 2001

    Daniel and Titman (1997) doubt the risk-based explanation. They contend that it is "characteristics, not covariances," that produce return dispersion. For example, the risk-based story says that high BtM ...Read More

  • The Error Term

    by Eugene Fama Jr. — Saturday, December 1, 2001

    Both cases have the same factor exposures and the same expected returns as the market. Cases 1 and 2, however, have significantly higher after-tax expected returns, especially in periods where dividend yields ...Read More

  • Being Socially Responsible All The Rage

    by Staff — Wednesday, November 28, 2001

    Assets in socially responsible funds have continued to rise dramatically. According to a new report by the Social Investment Forum, assets under management in socially screened portfolios have topped $2 ...Read More

  • Will McClatchy

    ETFs for the Buy-and-Hold Investor

    by Will McClatchy — Wednesday, November 21, 2001

    The buy-and-hold investor has as much to gain from ETFs as anyone. While media hoopla has focused on day traders using ETF, in reality ETFs' greatest strengths lie in their long-term features. Especially when ...Read More

  • Larry Swedroe

    Risk and Expected Return

    by Larry Swedroe — Tuesday, November 20, 2001

    The last half of the twentieth century was a golden era for US equity investors. From 1950 through 1999 the S&P 500 Index produced annualized returns of 13.6% per annum, or a real rate of 9.2% per annum. Even ...Read More

  • iShares Global Sector Funds hit the Market

    by Staff — Friday, November 16, 2001

    iShares continued its enthusiastic global expansion with the launch of the world's first global sector funds. The funds began trading today (11/16/2001) and cover global technology, telecom, energy, financials ...Read More

  • iShares Make Strong Gains as VIPERs Crack $1 Billion

    by Staff — Friday, November 16, 2001

    ETF assets soared in the previous 2 weeks in a strengthening market that was coupled with strong investor interest in ETFs. The iShares continued their recent boom, with all of the top iShares funds enjoying ...Read More

  • Larry Swedroe

    The Road Less Travelled

    by Larry Swedroe — Wednesday, November 14, 2001

    As they begin their journey, investors are faced with an immediate fork in the road-the choice between an active and a passive management strategy. Given the substantial body of evidence it seems clear that ...Read More

  • Jim Wiandt

    ETF Regulatory and Tax Complications

    by Jim Wiandt — Friday, November 9, 2001

    Many of the early developers of ETFs say that it took a miraculous convergence of determination and circumstance to ultimately garner the approval of the SEC and get the new products off the ground. The basic ...Read More

  • The Societal Risk Premium

    by William Bernstein — Thursday, November 8, 2001

    Financial economists like to talk about the risk-free rate: basically, the time value of money sitting in a perfectly safe vehicle. From an historical perspective per se, the very use of the term is ...Read More

  • Jim Wiandt

    Let The Commenting Begin

    by Jim Wiandt — Wednesday, November 7, 2001

    The SEC today announced the long-awaited issuance of its concept release on actively managed exchange-traded funds (ETFs). Actively-managed ETFs increasingly threaten to invade the realm of ETFs, a space ...Read More

  • Fed Rates Lowered by Another Half Percent

    by Staff — Tuesday, November 6, 2001

    Reacting to an economy that has slid into recession, the Fed lowered interest rates by another 50 basis points (0.50%) to 2%. Stocks climbed on the news. The Fed rates are now at a 40-year low. The move market ...Read More

  • Barclays Introduces First Natural Resource ETF

    by Staff — Friday, October 26, 2001

    Barclays Global Investors began trading the iShares Goldman Sachs Natural Resources Exchange Traded Fund (ticker: IGE), the first ETF of its kind. The fund tracks the Goldman Sachs Natural Resources index, a ...Read More

  • Bogle Speaks!

    by Staff — Friday, October 26, 2001

    John Bogle fans were treated to classic indexing discourse from the great pioneer of indexing at the recent AXA Rosenberg investor conference in Boston. ...Read More

  • S&P Includes REITs and Amex Adds Options

    by Staff — Wednesday, October 24, 2001

    Standard & Poor's this month added several Real Estate Investment Trusts (REITs) to its US indexes for the first time. The firm recently concluded that REITs have become operating companies driving US economic ...Read More

  • Vanguard Debuts Term Life, Private Equities

    by Staff — Monday, October 22, 2001

    The Vanguard Group expanded its line of financial services recently with term life insurance and private equity offerings offered only to its clientele as part of its strategy to offer one-stop shopping for ...Read More

  • Some Germans Stock Up on Index Certificates,

    by Aviya Kushner — Thursday, October 18, 2001

    In the last year, when ETFs came to Germany, for us it didn't make sense to have index certificates. ETFs are better because there's more liquidity, a much smaller spread, and they're tradeable every day. ...Read More