Comments on: ETFs with Few Holdings… What’s the point? http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/ A Canadian Personal Finance Blog Sun, 14 Mar 2010 09:30:52 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Thicken My Wallet » Blog Archive » The problem with specialized ETFs http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-20698 Thicken My Wallet » Blog Archive » The problem with specialized ETFs Tue, 10 Nov 2009 08:49:55 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-20698 [...] reasons: over-specialization, high fees, poor investment strategy and, as Preet pointed out, an ETF with too few holdings to properly diversify (incidentally, that ETF, zeb.to, is also thinly traded at under 40,000 share [...] [...] reasons: over-specialization, high fees, poor investment strategy and, as Preet pointed out, an ETF with too few holdings to properly diversify (incidentally, that ETF, zeb.to, is also thinly traded at under 40,000 share [...]

]]> By: Canadian Personal Finance Blog » Blog Archive » Random Thoughts: Flip, Flop and Flu http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-20451 Canadian Personal Finance Blog » Blog Archive » Random Thoughts: Flip, Flop and Flu Fri, 06 Nov 2009 07:28:46 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-20451 [...] Preet talks about ETFs again in ETFs with Few Holdings… What’s the Point? [...] [...] Preet talks about ETFs again in ETFs with Few Holdings… What’s the Point? [...]

]]> By: Preet http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-20303 Preet Tue, 03 Nov 2009 00:34:46 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-20303 @WestcoastFP - good point. I have a feeling their ETFs will be used more for the next generation of managed portfolios as opposed to being a force within the DIY community. @WestcoastFP – good point. I have a feeling their ETFs will be used more for the next generation of managed portfolios as opposed to being a force within the DIY community.

]]> By: WestcoastFP http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-20251 WestcoastFP Mon, 02 Nov 2009 06:08:17 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-20251 Keep in mind that the $10 trade requires a minimum account size of $100,000 with Bmo's direct investing arm. For those with less funds the ETFs good be a good option. However, stay away from any newly issued ETFs until there is sufficient liquidity. Lack of liquidity will lead to large bid -ask differentials if you need to sell. Best to stick with Claymore or iShares until the Bmo ETFs gather more steam. On another note this makes good biz sense for BMO as investing can be zero sum game. If you don't invest in mutual funds at 2% then you will probably invest in the cheaper ETFs. As a producer, better to own a piece of both markets to hedge your bets. Keep in mind that the $10 trade requires a minimum account size of $100,000 with Bmo’s direct investing arm. For those with less funds the ETFs good be a good option. However, stay away from any newly issued ETFs until there is sufficient liquidity. Lack of liquidity will lead to large bid -ask differentials if you need to sell. Best to stick with Claymore or iShares until the Bmo ETFs gather more steam.
On another note this makes good biz sense for BMO as investing can be zero sum game. If you don’t invest in mutual funds at 2% then you will probably invest in the cheaper ETFs. As a producer, better to own a piece of both markets to hedge your bets.

]]> By: DH http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-20237 DH Mon, 02 Nov 2009 00:42:17 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-20237 BMO is looking out for themselves. Thanks for going into this more in depth. It's things like these that turn me off to anything that the big banks offer. They probably make most of their money off their own banking clients or like an RRSP group where you can only choose different funds/etfs from one bank. BMO is looking out for themselves. Thanks for going into this more in depth. It’s things like these that turn me off to anything that the big banks offer. They probably make most of their money off their own banking clients or like an RRSP group where you can only choose different funds/etfs from one bank.

]]> By: DH http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-20238 DH Mon, 02 Nov 2009 00:42:17 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-20238 BMO is looking out for themselves. Thanks for going into this more in depth. It's things like these that turn me off to anything that the big banks offer. They probably make most of their money off their own banking clients or like an RRSP group where you can only choose different funds/etfs from one bank. BMO is looking out for themselves. Thanks for going into this more in depth. It’s things like these that turn me off to anything that the big banks offer. They probably make most of their money off their own banking clients or like an RRSP group where you can only choose different funds/etfs from one bank.

]]> By: Ink-stained gorilla http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-19966 Ink-stained gorilla Fri, 30 Oct 2009 15:06:00 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-19966 I meant to say $50 million as the threshold. Anything that's stayed under $40 million - be careful. I meant to say $50 million as the threshold. Anything that’s stayed under $40 million – be careful.

]]> By: Ink-stained gorilla http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-19961 Ink-stained gorilla Fri, 30 Oct 2009 14:18:16 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-19961 The passive index market in Canada seems to be hitting a saturation point. I'm doing some work on ETFs right now and the market cap of the ETF industry is really only across a few mandates. Investors need to keep in mind that the threshold for an ETF to be profitable is $100 million in AUM. If it doesn't reach that in a couple of years, expect it to be turfed. The passive index market in Canada seems to be hitting a saturation point. I’m doing some work on ETFs right now and the market cap of the ETF industry is really only across a few mandates.

Investors need to keep in mind that the threshold for an ETF to be profitable is $100 million in AUM. If it doesn’t reach that in a couple of years, expect it to be turfed.

]]> By: Friday Links | The Canadian Finance Blog http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-19946 Friday Links | The Canadian Finance Blog Fri, 30 Oct 2009 09:03:31 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-19946 [...] Where Does All My Money Go asks what’s the point of ETFs with few holdings? [...] [...] Where Does All My Money Go asks what’s the point of ETFs with few holdings? [...]

]]> By: This and That: Spendthrift celebrities and more… | Canadian Capitalist http://www.wheredoesallmymoneygo.com/etfs-with-few-holdings-whats-the-point/comment-page-1/#comment-19924 This and That: Spendthrift celebrities and more… | Canadian Capitalist Fri, 30 Oct 2009 02:20:09 +0000 http://www.wheredoesallmymoneygo.com/?p=1384#comment-19924 [...] Preet asks what’s the point of introducing ETFs such as the BMO Equal Weight Diversified Bank ETF (ZEB) t.... [...] [...] Preet asks what’s the point of introducing ETFs such as the BMO Equal Weight Diversified Bank ETF (ZEB) t…. [...]

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