You know that you can't have it all. You can't say one thing and do another. That's the fastest way to break the trust of the people around you. You know BlackRock has been selling environmental, social, and governance (ESG) funds, promising investors they'll change the world by lowering greenhouse gas emissions. It's all a game to charge higher fees for funds, and to drive the EGOs of those in charge. But what you won't see anything about in the glossy ESG brochures is BlackRock's investments in bitcoin mining. That's because mining bitcoin is energy-intensive, generating massive amounts … [Read more...]
Why Bond Mutual Funds and ETFs No Longer Work
OK, third-quarter report cards are in, and investors want to know how they did. But perhaps just as important, they want to know the WHY behind the performance. When it comes to mutual funds and ETFs, there’s a better way to go, especially when it comes to choppy markets, which have been tough as of late. Why are bond prices down? Because interest rates have risen just a tiny bit, and bond prices move in the opposite direction of rates. Over the quarter, especially the last few weeks or so, interest rates have risen enough to lower prices for bonds this quarter. But we’re talking about a … [Read more...]
Why Mutual Funds and ETFs No Longer Work
Look, I know a lot of you own Mutual Funds and ETFs, especially if you’re wrapped up with an advisor where you invest, he wins. Today, there’re maybe a handful of funds I’d put my own money into, and the same probably applies to yours. The problem is, once you set sail, it’s hard to change course. I get it. But don’t be fooled by past voyages. Mutual Funds and ETFs are sold to you based on past performance. That’s like loading up the boat before a hurricane thinking, “well, the last trip went just fine.” Looking through the rearview mirror isn’t how you drive. But it’s absolutely how funds … [Read more...]
Ginnie Mae (GNMA) Bond Yields
What do Ginnie Mae (GNMA) bonds yield? The table below lists the yields on two of the major Ginnie Mae (GNMA) indices as well as the latest SEC yield on some of the top Ginnie Mae (GNMA) dedicated funds. A note of caution when you are looking at yields on Ginnie Mae funds. Like all SEC yields, these yields are based on the last 30-days of income generated by the fund. They are not directly comparable to the yields on the Merrill Lynch and Barclay’s Ginnie Mae (GNMA) indices. Description Symbol Yield as of 8/31/2021 Yield as of 9/30/2021 Merrill Lynch Ginnie Mae … [Read more...]
IT’S A GAMBLE: First Bitcoin ETF Will Be Loaded with Risk
Fund companies are racing hard to be the first to offer a bitcoin ETF. The Wall Street Journal's Michael Wursthorn reports on the risks of such funds, writing: Despite the additional safeguards, investors in such funds would have to deal with issues associated with trading futures, as well as the risks around cryptocurrencies. Todd Rosenbluth, head of ETF and mutual-fund research at CFRA, warned that futures-based ETFs rarely replicate the performance of the underlying market they track. The reason is pricing fluctuations between futures contracts and the spot market, especially if demand … [Read more...]
ETF Investing: Avoid the Madness of Crowds
Look at the huge money flowing into all the same stuff. This isn’t rocket science. At some point, when the fuel runneth dry—down, down, down they shall fall. Action Line: Prepare your portfolio now to avoid the madness of crowds. In The Wall Street Journal, Michael Wursthorn reports on the massive amount of money flowing into ETFs. He writes: Investors poured $705 billion into exchange-traded funds through the first seven months of the year, pushing 2021’s world-wide tally to a record $9.1 trillion, according to data from Morningstar Inc. Net flows so far this year have nearly … [Read more...]
BlackRock Wants Investors with a “Shared Vision”
Do you share BlackRock CEO Larry Fink's "vision?" BlackRock wants investors committed to a "shared vision to transfer to a low-carbon economy." The company's ESG guru for its iShares subsidiary, Sarah Kjellberg explained how she's implementing this vision to ETF Trends. They reported on the interview: Looking at how investors have integrated climate awareness into their portfolios, Kjellberg explains how BlackRock has integrated climate risks into their capital market assumptions. Kjellberg adds, “while we’re seeing institutions in the world take pretty significant action to address … [Read more...]
REPORT: Hidden Risk in Bond Funds?
A new report suggests there is often hidden risk U.S. bond funds that isn't being represented by their classification. Robin Wigglesworth reports in the Financial Times: Would a rose by any other name smell as sweet? It is a question many bond investors should be asking themselves and the managers of their money. A bombshell paper that has been gradually wending its way through the peer-reviewed academic publishing process has now finally appeared in the latest edition of the venerable Journal of Finance, and deserves a wide airing. Sifting through the individual reported investments of … [Read more...]
Bogle Warned: 800 lb. Gorillas & Greener Pastures
UPDATE: The numbers are in. BlackRock is pushing around boardrooms to focus on everything BUT profits and shareholder return. Politico reports: At companies across the globe, BlackRock supported 64 percent of environmental proposals and about a third of social and governance resolutions put forth by shareholders in a year when workforce diversity and climate risk rose to the top of investor concerns. With $9 trillion in assets under management and ownership of more than 7 percent of shares on the S&P 500, BlackRock voted against corporate management at 42 percent of shareholder … [Read more...]
Learn from Your Survival Guy: Coming Clean on Coal
OK, Your Survival Guy timed the market, overweighted a sector, and got emotional—three things you NEVER want to do as an investor. But, hey, I’m Your Survival Guy, not Mr. Perfect, and you can learn a lot from me because I’ve seen a lot. Back in 2015, when coal was a dirty four-letter word, Your Survival Guy felt it was oversold. The market was crazy, I thought, and so I bought a coal ETF, symbol KOL. Hey, the world needs coal, right? Well, apparently not, as my position was cut down like a Georgia pine, except I never heard “Timber!” You see, Your Survival Guy doesn’t live or die by the … [Read more...]
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