Talk:Exchange-traded fund

From Wikipedia, the free encyclopedia

Contents 1 Major Users of ETFs 2 This entry should include ETF criticism for balance 3 Pointless postulating 4 Actively managed ETFs 5 Definition of ETF too narrow? 6 Closed-Ended

[edit] Major Users of ETFs

Is this area really needed? Where's the source? Seems like spam to me.

—The preceding unsigned comment was added by 71.217.199.80 (talk) 17:23, 6 February 2007 (UTC).

[edit] This entry should include ETF criticism for balance

some links with ETF criticism to consider :

• Five Myths of Exchange-Traded Funds
• Exchange-Traded Funds: Beyond the Hype
• ETF's vs Indexed Mutual Funds
• Sue Stevens in Forbes 2003
• Walter Updegrave in CNN/Money 2005

DrFunn 22:58, 29 December 2006 (UTC)

---

Is the comment about leveraged powershares correct? I checked out powershares.com and did some web searching, and I think maybe it should say "proshares" not "powershares"... right ?

Proshares vs. Powershares

[edit] Pointless postulating

Hypothesis: Mutual Funds are not as Tax-Efficient due to any realize capital gains that must be distribute to their shareholders within in a given year (not sure if it is quarterly or annually). Vice Versa ETF capital gains do not need to be realized till they are redeemed however they are sold on the active market. This is assuming that at the end of the day The ETF and Mutual Fund NAV are about / near equal in value.

This study can really only be compared for Passively Manage Mutual Funds i.e. (Index funds, Passive Asset-Class Funds, and Passive Sector Funds) to their ETF counterparts however the following comparison if they exist can be further defined into the following categories.

No-Load Mutual Fund to No-load ETF (doubt that the No-Load ETF exist) Load Mutual Fund to Load ETF (doubt that the Loaded Passive Mutual fund exist) No-Load Mutual Fund to load ETF (Realistic) Loaded Mutual Fund to No-Load ETF (extremely unlikely to occur)

As for Actively Manage Mutual Funds unless otherwise proven not to utilized market timing (highly unlikely) should not even be consider in this study.

Additional things that should be considered & analyze are:

• Brokerage / Commission fees that is incurred for entry and exiting.
• Expense Ratio if any
• The amount being invested is a large amount in increments of

$10,000.00 (amount is open)

• Automatic Dividend Reinvestment fee if required

Restrictions that are imposed on study:

• No Limit Order
• No Buying on Margin
• No Short Selling
• No Stop-Loss Order imposed
• Tax-Loss Harvesting if incurred is a result of the Mutual fund’s & ETF’s Fund Manager not the Broker in question

Paul.Paquette (talk) 02:03, 1 January 2006 (UTC)

I have been talking to my finance professors via email correspondence here is a Transcript After reading the transcript, I would like to hear any suggestion and comment that you might have. Paul.Paquette

A few problems with your study:

• Open-end mutual funds can only be bought and sold at NAV at the end of the day. ETFs can be bought and sold at any price at any time based on supply and demand. This price may be higher or lower than NAV.
• ETFs are not immune from capital gains. Some ETFs have messed up their transactions and have realized capital gains which they have had to distribute to their shareholders.
• Some of the open-end mutual funds have accumulated huge capital losses, and they're able to use these to reduce or elimiate any capital gains they realize. I'm in two open-end mutual funds and neither has distributed any capital gains for the past five years.
• Why does it matter whether the share price of the ETF and open-end fund are similar? Don't you mean the dollar amount value of the shares?
• A "load" is a sales charge paid to the broker as a percentage of your investment. At a discount broker, when you buy an ETF or any stock, you pay a fixed commission which is not based on how large your investment is.
• There are plenty of index funds with loads out there.

correct me if i'm wrong, but all ETFs should be no-load.

- Jaysbro 16:02, 20 January 2006 (UTC)

This is an encylopedia! The aim of the article should be to present facts as established and held as consensus. The facts should be relevant to the subject at hand and appropriate to a global audience. Trying to answer this type of question is futile! The answer will at best be subjective, geographically limited and tempory; at worst it will be a gross simplification and misleading. If you wish to add facts then cite your sources. The answer to this type of question will almost always be someones POV. simonthebold 10:24, 15 September 2006 (UTC)

[edit] Actively managed ETFs

I dont' beleive they exist. Please supply details if you know of one. simonthebold 10:28, 15 September 2006 (UTC)

I believe this is one: [1] -- Tim Starling 22:48, 28 September 2006 (UTC)

[edit] Definition of ETF too narrow?

This article appears to define ETFs too narrowly. In its broadest definition an ETF is any financial instrument that is traded on a secondary market, that represents a basket of underlying securities. This includes certain actively managed investment companies (for example Closed-ended Funds and Investment Trusts).

The confusion lies, of course, in the fact that the term was invented for a certain type of open-ended passively managed fund and later broadened to encompass the older closed-ended variety. BaseTurnComplete 18:20, 17 December 2006 (UTC)

[edit] Closed-Ended

ETFs are not by definition closed-ended. This is just plain wrong. They are open-ended: shares are routinely created and cancelled to match supply and demand for the fund. However the mechanism by which they are created and cancelled is different to other open-ended funds. BaseTurnComplete 14:17, 27 March 2007 (UTC)