Friday Tidbits

First up is an IPO of Hutchison Port Holdings Trust which is part of conglomerate Hutchison Whampoa which will list in Singapore. The actual ports are in Hong Kong, Shenzhen and Macau but the listing, as mentioned, is in Singapore. The trust structure can be thought of as being like a REIT and this one will yield 5-6%. If you’ve been reading this blog for a while you know I think China is an important investment destination but also a very complex one. Our exposure is something of an underweight by way of the country’s weight in a couple of thematic ETFs. While I continue to believe banks, manufacturers and reverse mergers should be avoided I think things like ports, toll roads, energy and staples items are a good way to go. Chinese don’t have to speculate on real estate but there are things that they essentially have to do or money that has to be spent which is where I will continue to look. There was an article on Seeking Alpha yesterday titled Your Ira Doesn’t Have To Be Boring. The post was so bad I’m not going to link to it, I’ll just say your IRA probably should be boring. SPDR came out with two new ETFs. One is an emerging market bond fund denominated in local currency ticker symbol EBND and the other is an emerging market dividend fund ticker EDIV. Both are me too funds with some differences and some similarities. If you have interest in these spaces you should add these to the list of options to consider. Speaking of new ETFs, FactorShares listed...

Lazy Portfolio Evolves?

As our week long conversation about efficient portfolio construction progresses, it could also be thought of as a discussion about Lazy Portfolios. Yesterday I got an email informing me that RBS came out with a Trendpilot ETN for gold, symbol TBAR (IndexUniverse also had an article about it). This is the third fund in the lineup and I think there could be more coming. There is one for the S&P 500 with symbol TRND and one for the S&P 400 with symbol TRNM. I wrote about TRND and TRNM for theStreet if you want more details but basically the ETN replicates long exposure to the underlying when the underlying is above its 200 DMA and replicates t-bills when the underlying is below its 200 DMA. Before getting into strategy, these are notes issued by a bank that is 80% owned by the UK government and while I don’t think the central bank has propped them up only to later allow them to fail the facts of the issuer remain. Additionally, employing the 200 DMA strategy under the hood of the ETN is not plain vanilla, although it is plainer than if they were doing this in an ETF. That out of the way, we have been talking for the last few days about very simplistic portfolios for people just starting out (the idea being you might be a person of influence on investing in your various social or professional circles) but we could also be talking about lazy portfolios too. I’ve mentioned using the Schwab Large Cap ETF (SCHB) and the Schwab Small Cap ETF (SCHA) for certain accounts...

Lazy Portfolio Evolves?

As our week long conversation about efficient portfolio construction progresses, it could also be thought of as a discussion about Lazy Portfolios. Yesterday I got an email informing me that RBS came out with a Trendpilot ETN for gold, symbol TBAR (IndexUniverse also had an article about it). This is the third fund in the lineup and I think there could be more coming. There is one for the S&P 500 with symbol TRND and one for the S&P 400 with symbol TRNM. I wrote about TRND and TRNM for theStreet if you want more details but basically the ETN replicates long exposure to the underlying when the underlying is above its 200 DMA and replicates t-bills when the underlying is below its 200 DMA. Before getting into strategy, these are notes issued by a bank that is 80% owned by the UK government and while I don’t think the central bank has propped them up only to later allow them to fail the facts of the issuer remain. Additionally, employing the 200 DMA strategy under the hood of the ETN is not plain vanilla, although it is plainer than if they were doing this in an ETF. That out of the way, we have been talking for the last few days about very simplistic portfolios for people just starting out (the idea being you might be a person of influence on investing in your various social or professional circles) but we could also be talking about lazy portfolios too. I’ve mentioned using the Schwab Large Cap ETF (SCHB) and the Schwab Small Cap ETF (SCHA) for certain accounts...

Narrow Exposure Getting Easier to Implement

In keeping with the theme of efficient investing (fee-wise), there is a tie in to new ETFs that occurred to me. In response to my saying yesterday that in some accounts I use a broad foreign fund that avoids Europe and Japan a reader asked if I meant a fund that targets Australia, which is the case but that is not the only developed market I like. A while back I mentioned a filing for the Guggenheim ABC High Dividend ETF, this is still a filing and may never become a fund. The A in the name stands for Australia, B for Brazil and C for Canada. If it also included Norway it would cover a lot of bases but still the three makes for a very good combo in terms of foreign exposure that avoids Europe and Japan. Additionally the fund could also cover emerging for anyone willing to own Brazil as a proxy for all of emerging. So someone with an account at Schwab could buy SCHB and SCHA (we own both for some accounts) for domestic exposure and this ABC ETF for both developed and developing foreign for $9 in commission while having actively avoided parts of the world that even if you don’t think the fundamentals stink you are least buying countries with more diverse fundamental attributes–that being commodity based countries versus the US being service based. This grouping would provide better diversification, IMO, than something like EFA for the reasons stated above but would of course make the portfolio more vulnerable to meaningful commodity price declines. As the ABC fund is just a filing...

Narrow Exposure Getting Easier to Implement

In keeping with the theme of efficient investing (fee-wise), there is a tie in to new ETFs that occurred to me. In response to my saying yesterday that in some accounts I use a broad foreign fund that avoids Europe and Japan a reader asked if I meant a fund that targets Australia, which is the case but that is not the only developed market I like. A while back I mentioned a filing for the Guggenheim ABC High Dividend ETF, this is still a filing and may never become a fund. The A in the name stands for Australia, B for Brazil and C for Canada. If it also included Norway it would cover a lot of bases but still the three makes for a very good combo in terms of foreign exposure that avoids Europe and Japan. Additionally the fund could also cover emerging for anyone willing to own Brazil as a proxy for all of emerging. So someone with an account at Schwab could buy SCHB and SCHA (we own both for some accounts) for domestic exposure and this ABC ETF for both developed and developing foreign for $9 in commission while having actively avoided parts of the world that even if you don’t think the fundamentals stink you are least buying countries with more diverse fundamental attributes–that being commodity based countries versus the US being service based. This grouping would provide better diversification, IMO, than something like EFA for the reasons stated above but would of course make the portfolio more vulnerable to meaningful commodity price declines. As the ABC fund is just a filing...