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Larry Swedroe

How The Price You Pay Impacts Returns

by Larry Swedroe
Thursday, July 26, 2001

When forecasting investment returns, individuals often make the mistake of simply extrapolating historic returns into the future. In addition, investors make the mistake of "recency." Bull markets lead investors to expect higher future returns, and bear ...Read More

Article Library

  • News From the Week

    by Staff — Wednesday, July 25, 2001

    The Vanguard Group said it will jack up the minimum initial investment for its Selected Value Fund from $3,000 to $25,000, effective July 23. Vanguard also indicated that a 1% redemption fee would be assessed to shares redeemed within five years of ...Read More

  • John Spence

    Who Wants to Run a Mutual Fund?

    by John Spence — Tuesday, July 24, 2001

    I cringe when I hear comparisons between investing and sports, but I can't resist this time. When it comes to stock-picking, we're a nation of Monday morning quarterbacks. ...Read More

  • New iShares Based on Russell Mid-Cap Indexes

    by Staff — Friday, July 20, 2001

    Barclays Global Investors launched three iShares on the American Stock Exchange today. The new exchange-traded funds (ETFs) are tied to the Russell Midcap index, Russell Midcap Value index, and Russell Midcap Growth index. ...Read More

  • AMEX Beefs Up ETF Development

    by Staff — Wednesday, July 18, 2001

    The American Stock Exchange (AMEX) today announced the creation of a new business unit that will specialize in ETF development to leverage its position as a global leader in exchange-traded funds (ETFs). AMEX was instrumental in the development and ...Read More

  • John Spence

    ICI Urges SEC Not to Force More Frequent Fund Disclosures

    by John Spence — Tuesday, July 17, 2001

    Investment Company Institute (ICI), the mutual fund industry's trade group, yesterday released a statement outlining why it believes average investors would actually be harmed by more frequent holdings disclosures by mutual funds. Additionally, ICI ...Read More

  • John Spence

    Bank of New York Has ADR Index ETFs in the Works

    by John Spence — Monday, July 16, 2001

    Many institutional and retail investors like exchange-traded funds (ETFs) for cheap exposure to foreign markets. Bank of NY wants to drive costs down even lower, and has filed an exemptive application with the Securities and Exchange Commission (SEC) to ...Read More

  • Three New iShares for Tech Junkies

    by Staff — Thursday, July 12, 2001

    Barclays Global Investors (BGI) will launch three iShares ETFs tied to the following Goldman Sachs technology indexes: Networking, Semiconductors, and Software. They will begin trading on the American Stock Exchange (AMEX) starting July ...Read More

  • John Spence

    E*Trade Gets Dinged by NASD for Tech Index Fund Ad

    by John Spence — Monday, July 9, 2001

    Remember those online broker television ads of yesteryear that led you to believe that stock picking was so easy that even ADD-afflicted office punks and altruistic truck drivers could point-and-click their way to fabulous wealth in their spare time? ...Read More

  • Eugene F. Fama Jr, Vice President DFA

    What Makes an Asset Class?

    by Eugene Fama Jr. — Sunday, July 1, 2001

    Sometimes NASDAQ is referred to as an asset class, but it's not. It's an exchange that contains several asset classes. A partial index of NASDAQ stocks might proxy for a tech stock "asset class"—but there's little theoretical reason to think tech stocks ...Read More

  • Vanguard Files to Launch Extended Market ETF

    by Staff — Friday, June 29, 2001

    Indexing giant Vanguard today filed with the SEC to launch an extended market exchange-traded fund (ETF) tied to the Wilshire 4500 index. As with the recently-released Total Stock Market VIPERs (Vanguard Index Participation Equity Receipts), the extended ...Read More

  • Jim Wiandt

    NYSE-listed ETF to be Tied to Broad Chinese Index

    by Jim Wiandt — Thursday, June 28, 2001

    How's this for a macroeconomic play: short the declining superpower (U.S.A.) and go long on the up-and-comer (China). Until now it hasn't been possible. Coming soon, though, to a broker near you: an NYSE-listed ETF that tracks 25 of the most liquid stocks ...Read More

  • John Spence

    Paradise Lost? - S&P 500 Gets Ripped

    by John Spence — Wednesday, June 27, 2001

    A recent Money magazine article by mutual fund columnist Jason Zweig ("Is the S&P 500 rigged?") has managed to put a fright into at least a few of the investors who have an estimated $1 trillion in index funds pegged to the broad market benchmark. And ...Read More

  • From Our Canadian Bureau: iUnits Distributions

    by Dan Hallett — Thursday, June 21, 2001

    Barclays Global Investors (BGI) announced this week estimated distributions for its Canadian based exchange-traded funds (ETFs), known as iUnits. Unitholders of record as of June 27, 2001 will receive the distribution on June 28. ...Read More

  • AMEX and Tokyo Exchange to Cross-List ETFs

    by Staff — Tuesday, June 19, 2001

    The American Stock Exchange (AMEX) and the Tokyo Stock Exchange inked a deal today to cross-list and trade U.S. and Japanese exchange-traded funds (ETFs). The alliance is the latest move by AMEX to set up a global trading platform for ETFs. The exchange ...Read More

  • Barclays Global Investors to Rebalance MSCI iShares Early

    by Staff — Thursday, June 14, 2001

    Barclays Global Investors (BGI) says it will rebalance its iShares exchange-traded funds (ETFs) pegged to MSCI indexes by the end of August 2001. MSCI is adjusting its equity indexes for free-float weighting and broader market coverage, and will complete ...Read More

  • S&P Launches Global Sector Indexes in Australia

    by Staff — Wednesday, June 13, 2001

    Standard & Poor's (S&P) will begin live dissemination of real-time global sector indexes in Australia on June 25. S&P will launch 12 sector indexes from the broad Australia S&P/ASX 200 index, which covers approximately 89% of the total market ...Read More

  • Standard & Poor's to Design Stock Baskets for E*Trade

    by Staff — Monday, June 4, 2001

    In a development that underscores the growing popularity of stock baskets offered by online brokers, index provider Standard & Poor's (S&P) has inked a letter of intent with E*Trade to create custom "folios." S&P will create baskets that reflect broad ...Read More

  • State Street Launches Amsterdam ETF

    by Staff — Friday, June 1, 2001

    An exchange-traded fund (ETF) based on the the AEX Index, a cap-weighted index comprised of 25 leading stocks traded on the Amsterdam Stock Exchange, began trading Wednesday, 5/30/2001. The new ETF, called the streetTRACKS AEX Index ETF, is managed by ...Read More

  • Jim Wiandt

    Cross-Listed Equities Arrive

    by Jim Wiandt — Thursday, May 31, 2001

    The Deutsche Boerse and Eurex announced plans to cross-list 200 of the most liquid U.S. equities and derivatives. Trading is scheduled to begin in September on the Xetra platform. ...Read More

  • Dow Jones and Russell to Perform Annual Index Rebalancing

    by Staff — Friday, May 25, 2001

    Dow Jones Indexes today announced that it will release the results of its annual update for the Dow Jones Titans index family on June 1, after the close of U.S. markets. Stocks in the Dow Jones Global Titans 50, the Dow Jones Asian Titans 50, and the Dow ...Read More

  • From Our Canadian Bureau: New iUnits S&P 500 ETF

    by Dan Hallett — Thursday, May 24, 2001

    After a long delay, Barclays Global Investors officially announced the launch of its much anticipated fully RRSP-eligible exchange-traded fund (ETF) tracking the S&P 500 index. One might wonder why all the fuss, given the wide availability of U.S.-based ...Read More

  • John Spence

    Start Your Engines! - MSCI to Release New Index Constituents

    by John Spence — Friday, May 18, 2001

    The starting gun is cocked and ready for the biggest overhaul of an equity index series in history. Tomorrow, May 19, at 7:00 a.m. Eastern Daylight Time, Morgan Stanley Capital International (MSCI) will release the constituents of the MSCI Provisional ...Read More

  • Jim Wiandt

    Vanguard Poised to Move on VIPERs Launch

    by Jim Wiandt — Thursday, May 17, 2001

    Despite a jarring legal defeat that has left the launch of its S&P 500 VIPERs in doubt, the Vanguard Group intends to move forward in launching its Total Stock Market VIPERs. Vanguard plans to commence trading on its Total Stock Market VIPERs on May 31. ...Read More

  • John Spence

    ETF Based on Dow Begins Trading on European Exchange

    by John Spence — Thursday, May 17, 2001

    Dow Jones Indexes announced that it has licensed Paris-based Lyxor Asset Management to issue the first ETF in Europe based on the Dow Jones Industrial Average. The fund began trading today on the Euronext exchange, and has an annual expense ratio of ...Read More

  • Holy Land Gets Its First Index Fund

    by Aviya Kushner — Wednesday, May 9, 2001

    "Profits in the Land of the Prophets." That's the catchy slogan plastered across ads for the first-ever Israel index fund, Amidex 35, which was launched in June 1999. But can it actually be true? For many investors, Israel is not only a country of ...Read More

  • SEC Conducts Online Investor Survey

    by Staff — Wednesday, May 9, 2001

    The Securities and Exchange Commission (SEC) is performing an online survey to learn more about how investors are utilizing the Internet as an information resource when making important investment decisions. ...Read More

  • Vanguard to Implement New Online Tools

    by Sharon Rockey — Monday, May 7, 2001

    Vanguard's online brokerage service is set to include "Consolidated View," a one-stop simple approach where shareholders can manage all their financial assets online. The account aggregation tool was developed by CashEdge, and allows investors to view all ...Read More

  • John Spence

    Japan Gives Green Light On ETFs

    by John Spence — Wednesday, May 2, 2001

    Japan has finally given the official go-ahead on exchange-traded funds (ETFs). Exchange-traded funds have experienced explosive growth in the ...Read More

  • Jim Wiandt

    S&P Prevails - Vanguard Loses Landmark Lawsuit

    by Jim Wiandt — Thursday, April 26, 2001

    The judgment is in. Standard & Poor's prevailed over The Vanguard Group in a closely-watched lawsuit. According to a statement released by Standard & Poor's parent company, McGraw Hill Companies, U.S. District Court Judge Alvin K. Hellerstein ruled that ...Read More

  • Why Invest Overseas At All?

    by Sam Henry — Wednesday, April 25, 2001

    Before you buy an international index fund, you might ask whether it makes sense to invest overseas at all. Although this is a complicated question, it seems pretty clear that the increased diversification and opportunity provided by overseas equities ...Read More

  • John Spence

    Upcoming Retail HOLDRs Look Familiar

    by John Spence — Monday, April 23, 2001

    More and more individual investors are recognizing the benefits that exchange-traded funds (ETFs) and HOLDRs offer as a cheap way to gain exposure to different sectors of the economy. However, as with traditional mutual funds, it's important to examine ...Read More

  • Netfolio: New Kid on the "Do-It-Yourself" Block

    by Sharon Rockey — Friday, April 20, 2001

    When the mutual fund industry's key lobbying organization kicks up a fuss with the SEC about those newfangled investor-managed stock portfolios, you can bet it's because somebody's feeling threatened. Netfolio is the most recent threat. ...Read More

  • FXI Launches New Index for China

    by Staff — Friday, April 20, 2001

    More news out of Asia. Yesterday we told you about the Hong Kong exchange announcement to cross-trade exchange-traded funds (ETFs) on May 2, just two days before the Singapore exchange will cross-list ETFs with the American Stock Exchange (AMEX). ...Read More

  • John Spence

    ETFs to Cross-Trade in Hong Kong

    by John Spence — Thursday, April 19, 2001

    The American Stock Exchange (AMEX) has taken another step toward its vision of a fungible global trading platform for exchange-traded funds (ETFs). Next stop: Hong Kong. ...Read More

  • The Expected Return One-Step

    by William Bernstein — Wednesday, April 18, 2001

    After any particularly wrenching period in the markets, I usually get a few calls and messages in the following vein: "You saw how the Nasdaq just got cut off at the knees on no fundamental news… do you still believe that the market is efficient?" To ...Read More

  • Larry Swedroe

    Survivorship Bias

    by Larry Swedroe — Friday, April 13, 2001

    The above headline should be an SEC-required disclosure for advertisements of many mutual funds. The reported returns of many fund families and their funds are often either misrepresentations (intentional or unintentional) of the returns earned by ...Read More

  • John Spence

    Record Numbers of Funds Blown Up in Market Minefield

    by John Spence — Thursday, April 12, 2001

    Yesterday, we told you that Vanguard announced plans to close and liquidate two of its funds. Could this be a harbinger of more funds throwing in the towel in coming months if the down market continues? How bad is it out there? Let's take a look. ...Read More

  • Vanguard_to_close_and_liquidate_two_funds

    by Staff — Wednesday, April 11, 2001

    The Vanguard Group recently announced the closing and planned liquidation of two funds, and also the re-opening of two funds to new shareholder accounts. On April 6, Vanguard said it would cease accepting new accounts and shareholder purchases for ...Read More

  • Savings on Capital Gains Ease Losses

    by Adrienne Pauly — Monday, April 9, 2001

    Many index fund investors can take some comfort this tax season that they are not paying capital gains on funds reflecting lost value. Both Barclays Global Investors and the Vanguard Group report they have not needed to distribute capital gains to ...Read More

  • AMEX and Singapore Exchange to Cross-List ETFs

    by Staff — Thursday, April 5, 2001

    The American Stock Exchange (AMEX) and the Singapore Exchange (SGX) today said they will begin listing and trading exchange-traded funds (ETFs) and HOLDRs on SGX Securities Trading starting May 4th. ...Read More

  • Jim Wiandt

    ETF Trends - Volatile Market Alters the Playing Field

    by Jim Wiandt — Tuesday, April 3, 2001

    Despite the sharp market downturn, and declining asset values, exchange-traded funds (ETFs) have continued to gain assets. The value of the U.S. total market as measured by the Wilshire 5000 declined in value by 22.05% over the 6-month period from ...Read More

  • Mutual Fund Tax Bite Can Be Bigger Than Bark

    by Christian Chensvold — Monday, April 2, 2001

    April 16 is nearly upon us. In honor of tax season, we're running an article series to help investors understand how mutual funds are taxed. In this first installment, we examine the basics with a general overview of the subject. Later this week, we'll ...Read More