As a continuation of our previous discussion earlier this month on small value mutual funds, today I'd like to review the metrics of some popular small value ETFs. As a reminder, the smaller and more "valuey" the stocks that a fund owns, the higher the expected returns of the portfolio are.
The following table, with data from Morningstar as of June 30, 2014, shows various metrics for the seven small value ETFs with at least $100 million in assets under management.The list includes three ETFs from iShares, as well as funds from Guggenheim, SPDR, Vanguard and WisdomTree.
The table shows weighted average market capitalization to demonstrate each fund's relative exposure to the size premium in addition to four different value metrics (price-to-earnings, price-to-book, price-to-sales and price-to-cash flow) to demonstrate each fund's relative exposure to the premium provided by value stocks.
Read the rest of the article on ETF.com.
To really help people, financial planners have to delve into the the feelings and emotions that drive their clients' financial decisions. One planner explains why that's so hard.
While most of us financial advisers want to do the best for our clients, we often struggle at the task.
The main problem, as I recently wrote: We don’t know our clients well enough. We may say that a client’s values and goals are important, but most of us don’t adequately explore these more personal (a.k.a. “touchy-feely”) parts of a client’s life.
Read the rest of the article on Time.
In my book, “Think, Act, and Invest Like Warren Buffett,” I noted that the Oracle of Omaha advised investors: “We have long felt that the only value of stock forecasters is to make fortune-tellers look good. Even now, Charlie (Munger) and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.”
I also noted the anomaly, and tragedy, that while investors idolize Buffett, many tend to do exactly the opposite of what he advises—and that applies to acting on the advice of forecasters such as John Hussman.
John Hussman runs the Hussman family of mutual funds. He’s also a former professor of economics and international finance at the University of Michigan, and has a Ph.D. He’s perhaps best known for his persistent criticism of the U.S. Treasury and the Federal Reserve. Since late 2009, he has been calling for another financial crisis due to bad policy choices made by the U.S. government.
Read the rest of the article on ETF.com.