Archive for the ‘ETF Performance’ Category

21 Lowest and 21 Highest Cost US Large-Cap ETFs In The Current Expenses Price War

Monday, May 1st, 2017

There is a price war going on among fund sponsors with some ETFs now having expense ratios from 3 basis points to 5 basis points.

Keeping costs low is key to long-term returns generally, and specifically to index funds.

Here is a list of the 21 lowest expense ratio and 21 highest expense ratio US large-cap ETFs that have at least $100 million of assets under management.

(click image to enlarge)

2017-05-01_LowestCostAndHighestCostUS-LC_ETFs
The largest ETF (the S&P 500 tracker, SPY) is among the least expensive at 9 basis points, but more expensive than two other S&P 500 ETFs (IVV at 7 basis points, and VOO at 4 basis points).

For a $1 million position, 1 basis point amounts to $100 per year; or $200 extra return per year with IVV and $500 per year extra return with VOO.

If all you want to do is buy and hold the S&P 500, VOO probably is the most sensible approach.  On the other hand, if you want to be able to sell covered options on your S&P 500 position for income, you need to stick with SPY.

Schwab has a US large-cap and a US broad market (also large-cap) ETF at 3 basis points.

Before you know it, some very large ETFs may have zero expense ratios — it could happen.

How so?  Two things possibly:

  • Some sponsors may chose to offer “lead funds” such as a US large-cap fund at zero expense (operating at a loss) to gather assets on the assumption that if they can capture a core assets, they have a good shot at capturing other assets that are operated profitably — certainly that has been the case with money market funds for the past 8 years.
  • The combination of mega-size and revenue from securities lending should make is possible to operate at least marginally profitably on some funds to either gather assets, or compete to retain assets against others who lower fees to gather assets.  When funds lend securities, they earn a fee, which is shared partially with the manager in most cases (not shared at Vanguard).

iShares, for example keeps from 15% to 28.5% of the securities lending revenue on it funds.  If sponsors could live off of the lending revenue share alone, and also make certain competitive asset gathering or retention decisions, expense ratios on some funds could go to zero.

Here is some of what iShares published about securities lending by ETFs:

2017-05-01_ishare sec lending dist

2017-05-01_sharesLendingRev

iShareSecLending

Whether sponsors do or do not keep a share of securities lending fees, as expense ratios approach zero (and 3 basis point to 5 basis point expense ratios are approaching zero in effect), the impact of securities lending begins to have a significant effect on the tracking error of an index fund — such that on occasion the fund could outperform its benchmark even with the drag of a management fee.

Other important factors that impact tracking error include the amount of cash held for liquidity; the effectiveness of sampling if index replication is not used; and the timeliness and accuracy of rebalancing and reconstitution.

Anyway, we are approaching the time where Warren Buffet’s concern about Wall Street drag on returns, and the damage to investors, may be approaching an end for large index funds.  It is typically said that you cannot buy an index, only a fund tracking an index.  Well, they two are approaching the point of being one and the same.

Overall, the highest costs US large-cap funds, with expense ratios from 48 to 64 basis points did not do worse than the lowest costs funds.

In fact if you simply average the returns (not asset weighted), the highest cost group did a little bit better than the lowest cost group.  That was not due to better management, but to somewhat specialized large-cap strategies that did better, such as technology oriented NASDAQ exposures.

That shows that it is possible for higher fees to be justified in some cases by deviating from the broadest indexes, but that is a case-by-case situation.

If you are buying broad indexes, pay really close attention to expenses as one of the primary drivers.  For specialized funds, category relative expenses can be important, but absolute expenses may not be as important as for broad index funds.

Securities Mentioned In This Article:

SCHX, SCHB, VOO, VTI, ITOT, VV, IVV, MGC, VIG, SPY, GSLC, VUG, SCHG, MGK, IUSG, VTV, SCHD, SCHV, MGV, VYM, IUSV, FTCS, PKW, FEX, PTLC, KLD, DSI, MOAT, FTC, QQXT, QQEW, FPX, PWB, FVD, DEF, FTA, PWV, PFM, RDVY, RDIV, RWL, OUSA

 

 

 

 

 

30 DM and 22 EM Country ETFs Total Return Performance 1, 3, 5, 10 Years

Saturday, January 2nd, 2016

DM performance 2015-12-31

EM performance 2015-12-31

ETFs 20% Or More Off 1-Year High (12/10/15)

Friday, December 11th, 2015

Representative sampling of long-only, non-leveraged ETFs trading at least $10,000 per minute, priced 20% of more below their 1-year high:

SYMBOL NAME % OFF HI
UNG UNITED STATES NATURAL GAS ETF (59.26)
USO UNITED STATES OIL ETF (49.87)
XME SPDR S&P METALS & MINING ETF (49.13)
GREK GLOBAL X FTSE GREECE 20 ETF (47.25)
TAN GUGGENHEIM SOLAR ETF (45.15)
AMJ JP MORGAN CHASE ALERIAN ETN (42.52)
XOP SPDR S&P OIL & GAS EXPL & PROD ETF (40.52)
EWZ ISHARES MSCI BRAZIL CAPPED ETF (39.62)
TUR ISHARES MSCI TURKEY ETF (38.17)
GDX MARKET VECTORS GOLD MINERS ETF (38.06)
XES SPDR S&P OIL & GAS EQUIP & SERVS ETF (37.85)
AMLP ALPS ALERIAN MLP ETF (37.43)
DEM WISDOMTREE EMRG MRKT HG DIV ETF (33.80)
FXI ISHARES CHINA LARGE CAP ETF (32.61)
ILF ISHARES LATIN AMERICA 40 ETF (32.17)
EMLP FIRST TRUST NORTH AMERICAN ENERG ETF (30.45)
GNR SPDR S&P GLOBAL NATURAL RESOURCS ETF (30.31)
MCHI ISHARES MSCI CHINA ETF (30.28)
IEZ ISHARES US OIL EQUIP SER ETF (29.80)
ECH ISHARES MSCI CHILE CAPPED ETF (28.96)
THD ISHARES MSCI THAILAND CAPPED ETF (28.78)
VWO VANGUARD FTSE EMERGING MARKETS ETF (27.77)
DWX SPDR S&P INTERNATIONAL DIVIDEND ETF (27.55)
EWM ISHARES MSCI MALAYSIA ETF (26.92)
ERUS ISHARES MSCI RUSSIA CAPPED ETF (26.78)
OIH MARKET VECTORS OIL SERVICES ETF (26.41)
EEM ISHARES MSCI EMERGING MARKETS ETF (26.38)
RSX MARKET VECTORS RUSSIA ETF (26.21)
VDE VANGUARD ENERGY ETF (26.20)
GXC SPDR S&P CHINA ETF (25.36)
PID POWERSHARES INTL DVDND ACHVRS ETF (25.00)
IYE ISHARES US ENERGY ETF (24.81)
XBI SPDR S&P BIOTECH ETF (24.58)
EEMV ISHARES MSCI MARKETS MIN VOL ETF (23.85)
VNM MARKET VECTORS VIETNAM TC ETF (23.81)
EWA ISHARES MSCI AUSTRALIA ETF (23.70)
SLV ISHARES SILVER TRUST ETF (23.62)
EWS ISHARES MSCI SINGAPORE ETF (23.38)
FM ISHARES MSCI FRONTIER 100 ETF (22.67)
EWT ISHARES MSCI TAIWAN ETF (22.67)
INDY ISHARES INDIA 50 ETF (21.61)
EPHE ISHARES MSCI PHILIPPINES ETF (21.45)
EPP ISHARES MSCI PACIFIC EX JAPAN ETF (21.42)
INDA ISHARES MSCI INDIA INDEX ETF (21.33)
IDV ISHARES INTERNATIONAL SEL DIV ETF (20.31)

ETFs within 3% of 1-Year High (12/10/15)

Friday, December 11th, 2015

These ETFs, with at least $10,000 per minute 3-month average trading volume, were within 3% of their 1-year high price as of Dec 10, 2015:

SYMBOL NAME % OFF HI
SCHZ SCHWAB US AGGREGATE BOND ETF (2.99)
ONEQ FIDELITY NASDAQ COMPOSITE INDX ETF (2.95)
GOVT ISHARES CORE US TREASURY BOND ETF (2.90)
IGV ISHARES NORTH AMRN TECH SOFT ETF (2.83)
IYC ISHARES US CONSUMER SERVICES ETF (2.80)
FDIS FIDELITY MSCI CONS DISCR INDX ETF (2.74)
OEF ISHARES S&P 100 ETF (2.72)
PSL PWRSHRS DWA CNSMR STPLS MNTM ETF (2.61)
IWF ISHARES RUSSELL 1000 GROWTH ETF (2.60)
FSTA FIDELITY MSCI CONS STPLS INDX ETF (2.45)
FDN FIRST TRUST INTERNET INDEX CF ETF (2.38)
GVI ISHARES INT GOV CREDIT BOND ETF (2.34)
XLY SPDR FUND CONSUMER DISCRE SELECT ETF (2.31)
IYK ISHARES US CONSUMER GOODS ETF (2.31)
BNDX VANGUARD TOTAL INTERNATIONAL BND ETF (2.29)
USMV ISHARES MSCI USA MIN VOLILITY ETF (2.28)
STPZ PIMCO 1-5 YEAR US TIPS INDEX ETF (2.27)
RYT GUGGENHEIM S&P 500 EQUAL WE TECH ETF (2.21)
MBB ISHARES MBS ETF (2.15)
IXN ISHARES GLOBAL TECH ETF (2.14)
SCHR SCHWAB INTERMEDIATE TERM US TRS ETF (2.13)
XLG GUGGENHEIM RUSSELL TOP 50 MEG ETF (2.11)
FTEC FIDELITY MSCI INFOR TECH INDX ETF (2.10)
QUAL ISHARES MSCI USA QUALITY FACTOR ETF (2.10)
IYW ISHARES US TECHNOLOGY ETF (2.08)
FPE FIRST TRUST PREFERRED SEC INCOME ETF (2.07)
VGT VANGUARD INFORMATION TECHNOLOGY ETF (2.07)
IGM ISHARES NORTH AMERICAN TECH ETF (1.97)
SPLV POWERSHARES S&P 500 LOW VOLAT ETF (1.95)
XLK TECHNOLOGY SELECT SECTOR SPDR ETF (1.93)
IVW ISHARES S&P 500 GROWTH ETF (1.91)
AGZ ISHARES AGENCY BOND ETF (1.91)
ITM MARKET VECTORS INTERM MUN IND ETF (1.74)
MUB ISHARES NATIONL AMT FREE MUNI ETF (1.71)
TFI SPDR NUVEEN BARCLAYS MUNI BOND ETF (1.70)
IEI ISHARES 3-7 YEAR TRERY BOND ETF (1.68)
MTUM ISHARES MSCI USA MOMENTUM FACTOR ETF (1.63)
TDTT FLEXSHARES IBOXX 3 YR TIPS IDX ETF (1.58)
XLP SPDR FUND CONSUMER STAPLES ETF (1.55)
VTIP VANGUARD SHRT INF PROT SEC INDEX ETF (1.53)
QQQ POWERSHARES QQQ TRUST SRS 1 ETF (1.53)
ITE SPDR BARCLAYS INTERMEDIATE TERM ETF (1.53)
VCSH VANGUARD SHORT TERM COR BD ETF (1.47)
SJB PROSHARES SHORT HIGH YIELD ETF (1.31)
USDU WISDOMTREE BLOMBRG US DOL BUL ETF (1.26)
BSCH GUGGENHEIM BLLSHS 2017 CORP BND ETF (1.22)
BSV VANGUARD SHORT-TERM BOND ETF (1.14)
SCPB SPDR BARCLAYS SHORT TERM CORP ETF (0.98)
VMBS VANGUARD MORTGAGE BACKED SEC ETF (0.92)
RTH MARKET VECTORS RETAIL ETF (0.89)
PGX POWERSHARES PREFERRED PORTFOLIO ETF (0.87)
RHS GUGGENHEIM S&P 500 EQUAL WE CONS ETF (0.84)
CSJ ISHARES 1-3 YEAR CREDIT BOND ETF (0.83)
VGSH VANGUARD SHORT TERM GOVERNMENT ETF (0.73)
SHY ISHARES 1-3 YEAR TREASRY BOND ETF (0.71)
SUB ISHARES SHOR TERM NAL AMT FRE ETF (0.70)
SCHO SCHWAB SHORT TERM US TREASURY ETF (0.69)
PSK SPDR WELLS FARGO PREFERRED STOCK ETF (0.66)
SHM SPDR NUVEEN BARCLAYS SHORT TERM ETF (0.65)
FLOT ISHARES FLOATING RATE BOND ETF (0.59)
PGF POWERSHARES FINANCIAL PREFERRED ETF (0.59)
MINT PIMCO ENHANCED SHRT MATURTY ACTV ETF (0.58)
GSY GUGGENHEIM SHORT DURATION ETF (0.31)
NEAR ISHARES SHORT MATURITY BOND ETF (0.28)
BIL SPDR BARCLAYS 1-3 MONTH T-BILL ETF (0.15)
SHV ISHARES SHORT TREASURY BOND ETF (0.13)