News Mentions & Press Releases

Lyft, Zoom Mull ESG Disclosures

June 5, 2019
Dieter Holger — The Wall Street Journal

Lyft Inc. (LYFT) and Zoom Video Communications Inc. (ZM) are among recently listed technology startups mulling disclosures outlining their performance on environmental, social and governance goals, moves that come as investors increasingly look outside financials to evaluate a company’s risks and sustainability.

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The U.S.-China trade dispute may have investors concerned, but it’s not the only risk weighing on markets. Rusty Vanneman, CLS Investments President & CIO, discusses with Yahoo Finance’s Seana Smith on ‘The Ticker.’

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7 Best Bond Funds for Retirement

May 24, 2019
Debbie Carlson — U.S. News and World Report

Protect your retirement portfolio with bond funds.

People who are getting ready for retirement, or already retired, often boost their fixed-income asset allocation to protect the money they’ve earned. When considering bond funds for retirement, think about risk appetite and income needs, but also income-tax bracket, says Christopher Battifarano, chief investment officer at Florida-based FineMark National Bank & Trust. “If someone is moving into retirement and their tax bracket falls, they may want to explore going into corporate (bonds) because you could have some incremental yield,” he says. “If you can earn more in coupon income even after paying the tax, you’re in a better position.” Here are seven best bond exchange-traded funds for retirement.

iShares Core US Aggregate Bond ETF (ticker: AGG)

The AGG is a broadly diversified ETF that’s tied to the Bloomberg Barclays U.S. Aggregate Bond Index, considered the benchmark bond index and a core holding for a fixed-income portfolio. The ETF tracks an index of different types of U.S. investment-grade bonds, including U.S. Treasurys, agencies, commercial mortgage-backed securities and other debt, says Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA. It’s one of the cheapest fixed-income funds around at 0.05% – $5 for every $10,000 invested – and one of the biggest with $60 billion in assets under management. Its 12-month yield is 2.73%.

iShares 3-7 Year Treasury Bond ETF (IEI)

For investors who want safety, a little more control over their time horizon and to target a certain point on the yield curve, one example is IEI, Rosenbluth says. The ETF tracks a market-weighted index of U.S. Treasury debt with remaining maturity between three and seven years. By going out slightly further on the yield curve, IEI has a little higher yield, but holders also need to be aware the longer duration can increase interest rate risk. It has a 12-month yield of 2.07%.

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8 Best Municipal Bond Funds to Buy and Hold

May 21, 2019
Debbie Carlson — U.S. News and World Report

Muni bond funds are attractive to investors in high tax brackets.

Investors who are looking boost their portfolio’s income may want to consider tax-free municipal bond funds. Dunkin Allison, co-chief investment officer at Delegate Advisors, says muni bonds’ recent performance is strong, driven by solid U.S. economic growth and low unemployment, plus low supply and a strong demand because of the historically low interest rate environment. When Allison analyzes muni bond funds, he looks at credit quality versus the risk taken, duration and cost. In the current interest rate environment, he prefers short-duration bond funds, those with five years or less to maturity. Here are eight muni bond funds for buy-and-hold investors to consider.

Nuveen Select Tax-Free Income Portfolio (ticker: NXP)

Chuck Self, chief investment officer for iSectors, says he uses NXP, which is a closed-end fund. Self says 80% of NXP’s holdings are investment grade, and it is one of the few closed-end funds with less than 1% leverage, reducing risk. The fund has a tax-free income return of 3.75% and currently trades at a 4% discount to its net asset value, which Self says is normal for the fund. “The low leverage means it takes on less risk, which makes it a superior choice,” he adds. The expense ratio is 0.26%, which amounts to $26 for every $10,000 invested.

Vanguard Tax-Exempt Bond ETF (VTEB)

Marc Pfeffer, chief investment strategist at CLS Investments, says he likes VTEB for its high-credit offerings and very low cost, calling Vanguard a “premier player in the muni bond space.” VTEB’s expense ratio is 0.08%, one of the lowest among its peers. The exchange-traded fundtracks a market-weighted index of investment-grade debt from state and local governments and governmental agencies. The fund is tax free at the federal income tax level and free from the alternative minimum tax. The yield is 3%.

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The Story of an ETN (Exchange-Traded Note)

May 21, 2019
Grant Engelbart, CFA — ETF Trends

It all started on a fine August day in 2006. Bees were buzzing, China was surging, NINJA loans were flowing, and oil had just come off an impressive surge and was poised for new records. Exchange-traded products had been around for more than 15 years but had yet to reach their more recent levels of rapid growth. Investors wanted exposure to high-flying oil prices, and they wanted better tax treatment. In came Barclay’s, ready to raise the exchange-traded note (ETN) industry to new heights. The Barclays iPath S&P GSCI Crude Oil Total Return Index ETN (original ticker OIL) was born.

It didn’t take long before assets began to build in the product – helped, no doubt, by “peak oil” worries and insatiable demand from the rest of the world. Additional ETNs were issued throughout 2008 and 2009, and that was met with increased volumes in the product. (See issuance level in orange and net assets in green on chart below. More on this later.)

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Is Income Investing for You?

May 8, 2019
Lou Carlozo — Yahoo Finance

To what end should dividends drive an investor to invest? Truly, every dividend has its beginning, friends — at least in terms of how to start buying the stocks that offer them.

Aside from the obvious “which stocks” question, there’s no shame in studying the basics to get there. Answering these questions will help:

— Does a healthy dividend equal a healthy stock?

— How come not all stocks offer them?

— What are those dividend do’s and don’ts?

In basic terms, a dividend is a payment companies extend to shareholders as a result of quarterly excess earnings. And they can fatten portfolios over time. Experts contend that dividends can open the door to reliable returns, with the goodies sometimes streaming in for generations. What’s more, reinvested dividends over time can accumulate a large number of additional shares, which ignite the dividend’s initial value if the shares appreciate.

But before you rush for the nearest dividend gusher, take note that the digits aren’t always what they seem.

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Thematic ETFs: The Current Stage in ETF Evolution

May 8, 2019
Kostya Etus, CFA — ETF Trends

ETFs were once the baby of the investing world, the newest financial innovation. But it seems they have achieved at least teenager status now, as there are more than 2,300 ETFs available to purchase in the U.S. What may surprise you is that there are 161 unique ETF issuers, according to Morningstar data. Bet you can’t name more than 30!

With this saturated ETF landscape, it is getting tougher to compete on price alone, and there are only so many traditional asset classes to re-create.

So, what are all these issuers doing to be different, to compete, and to survive?

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OMAHA, Neb.–(BUSINESS WIRE)–CLS Investments, LLC (“CLS”) a third-party money manager and leading strategist of exchange-traded fund (“ETF”) portfolios has announced the launch of five new direct indexed, tax-managed strategies to be made available on the TAMP platform offered by FTJ FundChoice, an open architecture TAMP based in Cincinnati. The strategies, which are a response to growing client and investor demand for tax-efficient investment options, use a quantitative rules-based approach that aims to track market-cap weighted U.S. indices with the key benefit of tax-loss harvesting to off-set capital gains.

“We’re excited to launch these new strategies for FTJ FundChoice clients looking to gain access to a level of customization and tax management that was once only available to institutional investors,” says Shana Sissel, CAIA, Portfolio Manager at CLS. “We think this is very powerful – each client, depending on when they fund the account, will have different opportunities to replicate the index and tax-loss harvest and we’re taking that into account on an individual level.”

Over the last couple of years, direct indexing has grown in popularity among financial advisors and investors, primarily because of the additional tax alpha it can provide. When advisors utilize direct-indexing models, they can capitalize on tax loss harvesting opportunities to offset clients’ capital gains elsewhere.

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U.S. Stocks Slip on Mixed Earnings

April 15, 2019
Akane Otani and Donato Paolo Mancini — The Wall Street Journal

U.S. stocks fell Monday as a fresh batch of earnings reports sent bank shares sliding.

Stock trading has been muted the past few weeks as investors have waited to get a sense of how U.S. corporations fared in the first quarter.

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Can ‘nontransparent ETFs’ save active investing?

April 15, 2019
Chris Matthews — MarketWatch

Active managers have been locked in a 30-year war of attrition against passively managed exchange-traded funds, which have transformed from niche to juggernaut, representing roughly $4 trillion in assets today.

However, a recent decision by the Securities and Exchange Commission, which paves the way for active managers to offer so-called “nontransparent” ETFs, is being vetted by a number of industry participants as potential salvation for beleaguered money managers, who have both underperformed passive ETFs that track an index, like the S&P 500 SPX, SPY, or the Dow Jones Industrial Average DJIA, DIA, and experienced eroding market share.

On Monday, the SEC issued a decision, allowing Precidian, which owns the ActiveShares ETFs, to begin working with mutual-fund providers, including Legg Mason, American Century Investments, BlackRock Inc. BLK, Capital Group, and JPMorgan Chase & Co. JPM, among others, to create actively managed ETFs.

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