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Old 01-17-2016, 10:52 AM   #61
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Pretty much all ETFs here.
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Old 01-17-2016, 03:41 PM   #62
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All ETFs No reason other than convenience and at the time lower expense versus MF

Had a horrible experience with fidelity once. Turned me off of the MF experience and I can buy the same MF in ETF format ....

A question: The systemic ETF risk that is discussed really seems to be sector specific and the leveraged types of ETFs...not the broad market stuff like VTI. VXUS. SPY QQQQ. Etc. Does everyone concur ?
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Old 01-17-2016, 04:40 PM   #63
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Originally Posted by papadad111 View Post
...

A question: The systemic ETF risk that is discussed really seems to be sector specific and the leveraged types of ETFs...not the broad market stuff like VTI. VXUS. SPY QQQQ. Etc. Does everyone concur ?
My guess is yes you are right. I've never asked Vanguard whether their ETF's are in some way secured by the existence of almost identical funds. Of course, if the ETF price was different then the fund price, arbitrage should correct this. VG offers fund to ETF conversion but not the other way.

It is only when we have a crisis of confidence and stocks are cratering that these concerns come forward ... especially at night.
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Old 01-17-2016, 11:35 PM   #64
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.....A question: The systemic ETF risk that is discussed really seems to be sector specific and the leveraged types of ETFs...not the broad market stuff like VTI. VXUS. SPY QQQQ. Etc. Does everyone concur ?
That is how I understand it.
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Old 01-18-2016, 04:50 AM   #65
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My guess is yes you are right. I've never asked Vanguard whether their ETF's are in some way secured by the existence of almost identical funds. Of course, if the ETF price was different then the fund price, arbitrage should correct this. VG offers fund to ETF conversion but not the other way.

It is only when we have a crisis of confidence and stocks are cratering that these concerns come forward ... especially at night.
Only certain broker/dealers can purchase or redeem directly with Vanguard in a Creation Unit, which is 25,000 shares.
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Old 01-18-2016, 09:22 AM   #66
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Only certain broker/dealers can purchase or redeem directly with Vanguard in a Creation Unit, which is 25,000 shares.
Not sure what this shows. Want to expand on it?
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Old 01-18-2016, 09:26 AM   #67
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Not sure what this shows. Want to expand on it?
If you read the Prospectus it describes it. The price arbitrage between the ETF and the underlying stocks is possible because shares can be called or put to fund, but only via Creation Units.
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Old 01-18-2016, 10:47 AM   #68
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Thanks, creation units were always kind of mysterious to me. Does Vanguard get to create them or must it be non-VG? Does the arbitrage work during the trading period or only at the end of day? I guess to be really effective it should be intraday.

Orginally I think the intraday NAV was suppose to be available with a 20 minute delay. Yahoo used to have this denoted something like ETF.iov . But that seems to have never gotten off the ground. Vanguard used to provide the quote symbol but I could not actually use that symbol in the quote box. I was able to show a chart of the price versus NAV on Yahoo. But again that is current price versus 20 minute delay. If one can show that and pricing is quite stable then at least there is a feeling that the trade premium/discount is stable.

This then gets to suspicions about intraday pricing. Is it properly regulated? The premium/discount intraday is not apparently available. If one looks at a chart of ETF versus it's fund they overlap quite well. But that is a high level view and does not show intraday swings i.e. there is apparently no way to show the intraday swings in premium/discounts.

All this mystery makes me uncomfortable about ETF's although I've used them for some years. The more I write about my concerns, the more I feel funds are going to work better for my requirements.
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Old 01-23-2016, 08:02 AM   #69
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Here is an example of the kind of shenanigans that make me nervous about ETFs.
Barclays Rigged Its OIL ETN By Limiting New Creation Units | Zero Hedge
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Old 01-23-2016, 10:06 AM   #70
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With all due respects, that Barclay ETN is not very representative of the broader ETF's that most individual investors should consider. Now if you fancy yourself a gunslinger then that is another story.
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Old 01-23-2016, 12:37 PM   #71
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Personally, the thing I dislike most about ETFs is manually having to set-up orders for new contributions. Same for rebalancing.

It appears being hands off and just having recurring deposits/transfers to balanced funds is more conducive to my net worth than manually managing the portfolio.
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Old 01-23-2016, 12:41 PM   #72
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ETN's are not even ETF's.

Very different investments, an ETN is a really much more like a debt or bond and are backed only by the credit of the issuer.

It is not connected directly to actual stocks.
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Old 01-25-2016, 10:08 AM   #73
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To check an ETF for index mistracking, one can always plot it against the target index.

For the S&P 500, Vanguard's VOO and its much older brother SPDR SPY ("Spider") track the index fairly well.

I missed the S&P low point at 1814 last Wednesday (it's now 5% higher), so just set a March put option order to buy the index at an effective 6% off current value. Will see if that's going to hit. Can't play this kind of game with MFs.

PS. Yes, it hits. If the market drops 6%, I will be buying the S&P at even a lower point than last week. If it does not, I will be pocketing the option premium, which works out to 16% annual return on the cash that I set aside in case the option gets exercised.
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