Schwab U.S. Broad Market ETF (ARCA: SCHB)

Schwab U.S. Broad Market ETF (ARCA:SCHB), Quote.Headers.trade-ideas

Schwab U.S. Broad Market ETF

Technology

Financial Services

Healthcare

Consumer Cyclical

Industrials

Consumer Defensive

Communication Services

Energy

Real Estate

Basic Materials

Utilities

Other

To pursue its goal, the fund generally invests in stocks that are included in the Dow Jones U.S. Broad Stock Market Index. The index includes the largest 2,500 publicly traded U.S. companies for which pricing information is readily available. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace. As of August 31, 2023, the index was composed of 2,508 stocks.

Microsoft Corp

Apple Inc

NVIDIA Corporation

Amazon.Com Inc

Meta Platforms Inc. Class A

Alphabet Inc Cl A

Alphabet, Inc., Class C

Berkshire Hathaway Inc. (Class B)

Eli Lilly & Co.

Broadcom Inc Common

Schwab US Broad Market ETF

Options

Markets

Media

Trading Ideas

General

COIN

CSCO

HOLX

LTHM

LYFT

NVDA

SCHB

CNBC’s &#34;Fast Money: Halftime Report&#34; delivers market-moving news to investors.

15 Stocks Moved By Traders on &#39;Fast Money: Halftime Report&#39;

Analyst Color

Long Ideas

Broad U.S. Equity ETFs

Analyst Ratings

ETFs

A Perfect ETF For Frugal And New Investors Alike

AAPL

ITOT

MSFT

SCHX

Small Fee, Big Inflows For This ETF

CNBC&rsquo;s &quot;Fast Money: Halftime Report&quot; delivers market-moving news to investors.
The commentary delivered by hosts of the show often moves the stocks mentioned. The information is collected and refined using <a href="https://benzinga.grsm.io/register174">Benzinga Pro&rsquo;s</a> News Tool. Benzinga Pro users can access this information by using the News tool on any workstation.
Market Rebellion&rsquo;s Pete Najarian purchased Call Options in the following companies:
Bank of America Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bac#NYSE">BAC</a>) 
Cisco Systems Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/csco#NASDAQ">CSCO</a>) 
Nvidia Corporation (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) 
Macerich Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mac#NYSE">MAC</a>) 
Livent Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/lthm#NYSE">LTHM</a>)
Najarian sold Call Options in Valero Energy Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vlo#NYSE">VLO</a>)
Najarian purchased Put Options in Trade Desk (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/ttd#NASDAQ">TTD</a>)
Walt Disney Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dis#NYSE">DIS</a>) 12:42 P.M. - Najarian mentioned owning shares of Disney while discussing the company&rsquo;s earnings, which will be reported after the close on Wednesday, the stock then slid 0.52% lower.
Also Read:&nbsp;<a href="https://www.benzinga.com/tech/22/05/27131840/norwegian-central-bank-substantially-reduces-stakes-in-alibaba-and-this-chipmaker-heres-what-it-boug">Norwegian Central Bank Substantially Reduces Stakes In Alibaba And This Chipmaker: Here&#39;s What Norges Bought Instead</a>
Unusual options activity: 
Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tsm#NYSE">TSM</a>) 
Coinbase Global Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/coin#NASDAQ">COIN</a>) 
LYFT Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/lyft#NASDAQ">LYFT</a>)
Final Trades: 
Schwab US Broad Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/schb#NYSE">SCHB</a>) 
Merck &amp; Co., Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mrk#NYSE">MRK</a>) 
Hologic, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/holx#NASDAQ">HOLX</a>) 
Walgreens Boots Alliance Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/wba#NASDAQ">WBA</a>)

15 Stocks Moved By Traders on 'Fast Money: Halftime Report'

The world of exchange traded funds is a perfect place for those new to investing. Likewise, ETFs remain the places to be for investors looking for <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/03/13356644/jpmorgan-goes-low-in-search-of-etf-growth">cost-effective vehicles</a>.
Plenty of ETFs marry both of those themes.
<h3>What Happened</h3>
The Schwab US Broad Market ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/schb#NYSE">SCHB</a>) is an ideal fund for novice investors and penny pinchers alike. While SCHB isn&#39;t the cheapest ETF in the U.S., its annual fee of just 0.03 percent, or $3 on a $10,000 investment, puts it in among the least expensive ETFs.
SCHB tracks the Dow Jones U.S. Broad Stock Market Index, a cap-weighted benchmark with exposure to a significant chunk of the U.S. equity market. The fund currently holds 2,432 stocks.
&ldquo;There are a few benefits of weighting by market cap,&rdquo; said Morningstar <a href="https://www.morningstar.com/articles/922379/use-this-cheap-fund-to-simplify-your-portfolio.html">in a recent note</a>. &ldquo;This approach incorporates the cumulative knowledge aggregated in stock prices to size its positions. It keeps costs low because it doesn&rsquo;t require fundamental research analysts or skilled stock-pickers, who can be expensive to hire. While the market doesn&rsquo;t always get things right, it has done a good job valuing stocks over the long haul.&rdquo;
<h3>Why It&#39;s Important</h3>
SCHB holds more than quadruple the number of stocks that are found in the S&amp;P 500, but the cheap Schwab fund&#39;s sector weights are comparable to the S&amp;P 500&#39;s. Technology, health care and financial services names combine for 48.8 percent of SCHB&#39;s weight compared to about 48.4&nbsp;percent in the S&amp;P 500.
As such, investors should expect SCHB to perform inline with inexpensive S&amp;P 500 funds over time. Over the past three years, SCHB returned 50.3 percent compared to 50.2 percent for the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/voo#NYSE">VOO</a>). Both funds had the same annualized volatility over that period.
&ldquo;From its inception in November 2009 through March 2019, the fund has outpaced the category average return by 2.0% annually with similar risk,&rdquo; said Morningstar. &ldquo;Much of its relative outperformance can be attributed to its low-cost advantage. The fund carries meaningful risk. The index it tracks fell by more than the average large-blend peer during the bear market from October 2007 through March 2009. As a passive index strategy, this portfolio is always fully invested, so it won&rsquo;t miss a rally, but it exposes investors to the full brunt of market downturns.
As Morningstar notes, SCHB&#39;s fee is stunningly low compared to the 0.65 percent average for this fund category. The research firm has a Gold rating on SCHB.
Related Links
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/04/13497899/a-new-china-etf-to-consider">Consider This China ETF</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/04/13497898/yield-curve-normalization-lifts-leveraged-bond-etfs">Loving Leveraged Bond ETFs</a>

Broad market U.S. equity exchange traded funds have been fertile ground in the ETF fee wars. While annual fees are a fact of life in the fund universe, some ETFs charge barely noticeable expense ratios and data confirm investors love these low-cost products.
Just look at the iShares S&amp;P 1500 Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/itot#NYSE">ITOT</a>). With an annual fee of just 0.03 percent, or $3 on a $10,000 investment, ITOT competes with ETFs such as the Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and the Schwab U.S. Broad Market (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) for honors among the least expensive US-listed ETFs.
ITOT competes with those Schwab funds &ldquo;as the lowest cost ETPs available in the U.S. listed ETP spectrum. This fact is surely helping asset raising assets in this fund (over $2.7 billion in inflows thus far in 2017),&rdquo; said <a href="http://streetonefinancial.com/">Street One Financial</a> Vice President Paul Weisbruch in a recent note.
<h3>
	Somewhat Different</h3>
Total market ETFs, such as ITOT, offer some differences when measured against the S&amp;P 500, but there are similarities as well. ITOT follows the S&amp;P Total Market Index, which is a vastly different benchmark than the S&amp;P 500. The big difference is in the number of holdings. While the S&amp;P 500 holds just over 500 stocks, ITOT&#39;s roster <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/10/8562034/an-overlooked-etf-rakes-in-the-cash">is just over 3,600 stocks</a>.&nbsp;
None of ITOT&#39;s holdings command 3 percent of the ETF&#39;s weight. Top 10 holdings in the ETF include fare typical of cap-weighted, broad market funds, such as Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>), Microsoft Corporation (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>) and Exxon Mobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>).
Even with the differences between itself and the S&amp;P 500, ITOT&#39;s three-year returns and annualized volatility over that span only show negligible differences relative to the benchmark U.S. equity index.
<h3>
	Cheap Is Popular</h3>
As is often said, fees make a difference for long-term investors, which likely explains why so many of this year&#39;s top asset-gathering ETFs can be deemed &ldquo;low-cost&rdquo; products.
&ldquo;The fact that expense ratios are extremely low in these ETFs when compared to other ETPs across the U.S. listed landscape show that both retail and institutional portfolio managers continue to exhibit a very healthy appetite for &#39;cheap, passive beta&#39; exposure to markets in spite of the presence of more expensive alternatives (Active, Smart Beta) that have in many cases raised assets in their own rights,&rdquo; said Weisbruch.
ITOT now has $9.7 billion in assets under management, $2.8 billion of which has flowed into the fund this year.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/07/9742463/focusing-on-an-alternative-to-s-p-500-etfs">An S&amp;P 500 Alternative</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/07/9736860/etfs-dominate-first-half-leaving-active-with-work-to-do">ETFs Add Assets At Warp Speed</a>

Last week, BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares unit, the world&#39;s largest sponsor of exchange-traded funds, shook the ETF industry with wide-ranging fee reductions to its iShares core lineup, a suite of ETFs designed four years with cost-conscious, long-term investors in mind.
All told, iShares <a href="http://www.benzinga.com/news/16/10/8530578/blackrock-flexes-its-muscles-in-fee-battle-cuts-core-etf-prices">lowered fees on 15</a> of its 22 core ETFs, including well-known offerings such as the iShares Core S&amp;P 500 Index (ETF) (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>), iShares S&amp;P SmallCap 600 Index (ETF) (NYSE: <a class="ticker" href="/stock/ijr#NYSE">IJR</a>), iShares Core High Dividend ETF (iShares Trust NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)) and the iShares Barclays Aggregate Bond Fund (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>).
<h3>Mirroring Strategies</h3>
As is par for the course in the ETF business, fee cuts from one issuer are usually followed by some from a rival and usually that happens in short order. That is again the case as Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) responded to the iShares fee cuts with its own fee reductions, announced last Friday.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/10/8535976/inside-blackrocks-etf-fee-cuts">Inside BlackRock's ETF Fee Cuts</a></bzrelatedlink>
Schwab, the fifth-largest U.S. ETF issuer, said it lowered fees on five of its ETFs, which already among the industry&#39;s least expensive. The company lowered the annual expense ratios on the Schwab U S Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scha#NYSE">SCHA</a>) and the Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schm#NYSE">SCHM</a>) to 0.06 percent, or $6 per year on a $10,000 investment, from 0.07 percent.
The Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) is now charging 0.07 percent per year, down from 0.08 percent while the Schwab Emerging Markets Equity ETF (NYSE: <a class="ticker" href="/stock/sche#NYSE">SCHE</a>) saw its fee reduced to 0.13 percent annually down from 0.14 percent.
The Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>) undercuts the aforementioned AGG by a single basis point with a new annual fee of 0.04 percent.
Schwab clients can realize additional cost savings on the company&#39;s Schwab ETF OneSource platform, the largest commission-free platform in the brokerage business.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

News

SCHA

SCHE

SCHF

SCHM

SCHW

SCHZ

Schwab Has An Answer In Latest ETF Fee Tussle

The Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) did not enter the exchange-traded funds business until late 2009, a relatively late entry, but the company is making up for lost time. Home to $50.4 billion in ETF assets under management as of July 21, Schwab is now the fifth-largest U.S. ETF sponsor.
<h3>Late To The Party, But No Problem</h3>
Year-to-date flows indicate Schwab is competing quite well with larger rivals, such as BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>)'s iShares and Vanguard, the two largest U.S. ETF issuers.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/07/8268649/shorts-still-like-this-etfs-holdings">Shorts Still Like This ETF's Holdings</a></bzrelatedlink>
Schwab, &ldquo;a long-time provider of brokerage services and mutual funds, has emerged as one of the faster growing ETF providers in 2016. Aided by $7.69 billion of net inflows year to date through July 15, the firm has risen up the ranks and pulled closer to BlackRock iShares and Vanguard Group. Schwab, which has among the lowest expense ratios in the industry, has benefited from growing use of ETFs among retail investors and financial advisors,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Wednesday.
<h3>High Ratings</h3>
The research firm has a five-star rating, its highest, on shares of Schwab. Although it has surged more than 19 percent in just the past month, the stock is down more than 12 percent year-to-date.
A big reason advisors and investors are embracing Schwab ETFs is fees, as in Schwab has some of the lowest fees in the ETF universe. In some cases, Schwab ETFs sport lower fees than Vanguard equivalents, an impressive feat when considering Vanguard is often thought as the low cost leader in the fund world.
&ldquo;Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and Schwab U S Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) are the firm&#39;s two largest ETFs and each have a 0.03 percent expense ratio. SCHB gathered $681.5 million of new assets year to date through July 15, while SCHX had $569.6 million of net inflows,&rdquo; said S&amp;P Capital IQ.
The research firm rates both of those ETFs Overweight.
Schwab&#39;s ETF lineup is also benefiting from increased flows to <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/07/8206269/another-milestone-for-bond-etfs">fixed income ETFs</a> this year. Overall, the issuer sponsors four bond ETFs.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/07/8261845/new-direxion-etfs-target-gold-miners-european-financials">New Direxion ETFs Target Gold Miners, European Financials</a></bzrelatedlink>
&ldquo;With $994.3 million, Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>) gathered the second most net inflows thus far in 2016 among the firm&#39;s offerings. The $3.18 billion product, which holds investment-grade corporate bond and U.S. government securities, has a 0.05 percent expense ratio that is lower than comparable ETFs from iShares and Vanguard,&rdquo; added S&amp;P Capital IQ.
The research firm rates SCHZ Overweight as well.
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Bonds

Schwab Cements Status As An ETF Player

Most people invest in a 401(K) plan with high hopes of strong returns on their investment. However, the only thing guaranteed when it comes to your 401(k) plan is that participation comes at a price.
According to a new Hearts and Wallets poll, many Americans don&rsquo;t realize how much their 401(K) plan is costing them in fees.
The majority of 401(K) plans invest in mutual funds and ETFs, almost all of which charge an &ldquo;expense ratio&rdquo; for fund management. As of 2014, the average expense ratio for funds that invest in stocks was around 0.54 percent, which may seem small. However, for a number of Americans that don&rsquo;t realize they are paying anything at all for their 401(k), several hundred dollars in fees per year could come as quite a surprise.
<h3>It Doesn't Matter How The Fund Performs</h3>
The bad thing about these fees is that they are taken out of a fund each year no matter how it performs. In other words, if your 401(K) loses 15 percent of its value in one year, you will still be paying these fees.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/education/16/05/8008339/how-do-rising-interest-rates-affect-the-average-american#ixzz49UfyWYmk">How Do Rising Interest Rates Affect The Average American?</a></bzrelatedlink>
&ldquo;When you add together the Americans who say they don&rsquo;t know what they pay for their financial products and the number of people who say they pay nothing for the products they obtain through their retail financial stores, we have a major problem,&rdquo; <a href="http://www.heartsandwallets.com/most-americans-are-clueless-on-cost-of-their-financial-products/news/2016/04/">Hearts and Wallets</a> CEO Laura Varas explained.
The good news for 401(K) participants is that expense ratios have generally been on the decline in recent years. <a href="http://www.wsj.com/articles/401-k-fees-already-low-are-heading-lower-1463304601">ICI reports</a> the average expense ratio for funds invested in stocks was 0.74 percent as recently as 2009.
According to etfdb.com, the following five broad equity ETFs all have expense ratios of 0.05 percent or lower:
<ul>
<li>Schwab U S Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>)
</li><li>Schwab U S Large Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>)
</li><li>Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="/stock/vti#NYSE">VTI</a>)
</li><li>Vanguard 500 Index Fund (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>)
</li><li>Schwab Strategic Trust (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>)</li></ul>
If you want to know exactly how much you are paying in fees for your 401(K) plan, the information is required to be disclosed to you in your quarterly report from your plan&rsquo;s provider. And by the way, the roughly $4 quarterly cost of providing this information to you <a href="http://www.bankrate.com/finance/retirement/paying-401k-plan-1.aspx">may be</a> deducted from your 401(K) by your employer.
Disclosure: The author holds no position in the stocks mentioned.

Education

Personal Finance

Your 401(K) Plan May Be More Expensive Than You Think

Just over three years ago, BlackRock, Inc.&#39;s (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares unit, the world&#39;s largest issuer of exchange-traded funds, created the iShares Core Series, then a suite of 10 ETFs aimed at cost-conscious, long-term investors.
Comprised of four new and six existing funds, one of the pillars of the iShares Core Series was and continues to be low fees &ndash; one of the primary reasons so many buy-and-hold investors have ditched high-fee mutual funds for ETFs over the years. Fast-forward 37 months and not only has the iShares Core Series significantly expanded in terms of number of ETFs, but iShares is also taking the fee fight to low-cost leaders such as Vanguard and Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>).
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/11/5970473/of-rate-hikes-and-small-cap-etfs">Of Rate Hikes And Small-Cap ETFs</a></bzrelatedlink>
<h3>Undergoing Changes</h3>
In an announcement made Tuesday, iShares said it is paring the fees on seven of its core ETFs, bringing some of the annual expense ratios on those funds to as low as 0.03 percent per year. That works out to be a mere $3 for every $10,000 invested.
<h3>A Look At ITOT</h3>
The $2.7 billion iShares Core S&amp;P Total U.S. Stock Market ETF (iShares S&amp;P 1500 Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/itot#NYSE">ITOT</a>)) is charging 0.03 percent per year, down from 0.07 percent. With that new lower fee, ITOT is now slightly less expensive than popular, rival broad market U.S. equity ETFs, such as the Schwab U S Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) and the Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="/stock/vti#NYSE">VTI</a>). Those ETFs charge 0.04 percent and 0.05 percent a year, respectively.
ITOT is also changing indexes. On or around December 18, ITOT will switch benchmarks to the S&amp;P Total Market Index, which will bolster the ETF&#39;s exposure to micro- and small-cap stocks, <a href="http://www.ishares.com/us/products/239724/ITOT?referrer=tickerSearch">according to iShares</a>.
Among other U.S.-focused equity ETFs in the core suite, the iShares Russell 3000 Growth Index (ETF) (NYSE: IUSG) and the iShares Russell 3000 Value Index (ETF) (NYSE: <a class="ticker" href="/stock/iusv#NYSE">IUSV</a>) saw annual fees pared to 0.07 percent from 0.09 percent.
Ishares is also making some changes to the fixed income portion of its core lineup, including reducing the annual expense ratio on the iShares Core Total USD Bond Market ETF (iShares Trust (NYSE: <a class="ticker" href="/stock/iusb#NYSE">IUSB</a>)) to 0.12 percent from 0.15 percent.

	&ldquo;iShares Core International Aggregate Bond ETF (NYSE: IAGG) seeks to track the investment results of an index composed of international investment-grade bonds while seeking to mitigate foreign currency risk. IAGG will become part of the iShares Core at launch on Thursday. The iShares Core GNMA Bond ETF (NYSE: <a class="ticker" href="/stock/gnma#NYSE">GNMA</a>)[sic] (NASDAQ: <a class="ticker" href="/stock/gnma#NASDAQ">GNMA</a>) will no longer be part of the Core line-up and will change its name to the iShares GNMA Bond ETF,&rdquo; said the issuer in a statement. 
Three of the core suite&#39;s international equity offerings are also getting lower fees. For example, the $8.8 billion iShares Core MSCI Emerging Markets ETF (iShares Inc. (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>)) has a new annual fee of 0.12 percent. That makes IEMG less expensive than the Vanguard Emerging Markets Stock Index Fd (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), the <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5956584/as-index-providers-change-views-on-china-emerging-market-etfs">largest emerging markets ETF</a>. VWO charges 0.15 percent per year.

	The iShares Core MSCI Europe ETF (iShares Trust (NYSE: <a class="ticker" href="/stock/ieur#NYSE">IEUR</a>)) and the iShares Core MSCI Pacific ETF (iShares Trust (NYSE: <a class="ticker" href="/stock/ipac#NYSE">IPAC</a>)) are now charging 0.12 percent a year, down from 0.14 percent.
The iShares Core Suite now has 24 ETFs with a combined $62.8 billion in assets under management, <a href="http://www.ishares.com/us/products/product-list#categoryId=10&amp;lvl2=overview">according to iShares</a>.
Image Credit: <a href="https://pixabay.com/en/macbook-laptop-computer-office-924157/">Public Domain</a>

Emerging Markets

Eurozone

Emerging Market ETFs

Intraday Update

GNMA

IEMG

IEUR

IPAC

IUSB

IUSV

BlackRock's iShares Struts Its Low Fee ETF Stuff

Accessing the S&amp;P 500 via exchange traded funds is not difficult. Three ETFs &ndash;- the SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>), the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>) and the iShares Core S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>) &ndash;- offer exposure to the traditional version of the benchmark U.S. index.

	Although the aforementioned ETFs all track the same index, there are differences among the trio that long-term investors need to consider. For example, SPY, the world&#39;s largest ETF, is structured as a unit investment trust. That means investors that are considering holding SPY for extended periods cannot reinvest the dividends paid by the fund.

	&ldquo;This creates a cash drag when prices are rising. SPY is also not allowed to engage in securities lending--a technique many funds use to generate extra income that can be used to defray the cost of replicating an index,&rdquo; according to <a href="http://www.morningstar.com/Cover/videoCenter.aspx?id=713948">Morningstar</a>.

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/09/5831186/an-apple-etf-for-rising-rates">An Apple ETF For Rising Rates</a>

	SPY is also the most expensive of the three S&amp;P 500 ETFs mentioned here with an annual expense ratio of 0.0945 percent, or less than $9.50 per $10,000 invested. IVV and VOO charge 0.07 percent and 0.05 percent per year, respectively. Knowing that, it is not surprising that VOO offers a modest performance advantage over longer holding periods. For example, VOO is up 45.2 percent over the past three years, a tenth of a percentage point ahead of IVV and four basis points ahead of SPY.

	That is not to say SPY is bereft of advantages. As Morningstar notes, it is the most liquid S&amp;P 500 ETF and home to the most robust options market among S&amp;P 500 tracking funds.

	IVV and VOO &ldquo;are set up as regulated investment companies, a more flexible legal structure that allows reinvesting dividends and securities lending. While iShares&#39; IVV is a stand-alone exchange-traded fund, Vanguard&#39;s VOO is a separate share class of a mutual fund. VOO also has the lowest expense ratio of the three, and this has given it a slight performance edge since its inception,&rdquo; according to Morningstar.
<h3>
	Cheaper Options</h3>

	Penny-pinching investors can take heart because there are broad market ETFs that are even less expensive, in terms of annual fees, than VOO. For example, the Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) charges just 0.04 percent per year, or a mere $4 per $10,000 invested.

	SCHB has some other advantages over VOO and the S&amp;P 500 ETFs. The Schwab offering is home to more than 2,000 stocks, providing a deeper bench than S&amp;P 500 funds. Additionally, Schwab clients can trade SCHB commission-free, further reducing their investment costs. Vanguard clients have commission-free access to VOO while Fidelity clients can trade IVV sans commission.

	The Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) is also slightly less expensive than VOO. SCHX also carries a 0.04 percent annual fee and holds 760 stocks. That ETF can also be traded commission-free by Schwab clients.

Short Ideas

S&P 500, Broad Market ETFs On The Cheap

Investors looking to build a portfolio of ETFs may get caught up in the analysis of the fund provider, fees and tax structure. When selecting an ETF, however, the single most important determining factor is how the index is constructed.

	The makeup of the underlying portfolio of assets is key because it determines how the ETF will react to a variety of market conditions. This includes the security selection, weighting methodology and ongoing changes to the fund construction over time.
<h3>
	Passive Indexes</h3>

	Typically the lowest-cost funds are passive indexes like the Vanguard S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/voo#NYSE">VOO</a>) or Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>). Both ETFs offer annual expenses of 0.05 percent or lower and track well-known indexes that rarely change over time. This style of fund is perfect for a long-term core holding that will be a foundation to build tactical or alpha-seeking exposure to your portfolio.

	Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/14/08/4790257/consumer-discretionary-etfs-breakout-to-new-highs">Consumer Discretionary ETFs Breakout To New Highs</a>
<h3>
	Active Funds</h3>

	On the other side of the spectrum are active ETFs such as the PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>). This style of fund allows a portfolio manager the flexibility to select securities they feel are going to outperform a passive benchmark based on their proprietary research. Typically active ETFs come with higher fees as a result of greater maintenance needed for the fund.

	Because active funds typically select a unique mix of assets to try and beat their benchmark, the funds also come with the unknown quantity of either beating or lagging the preferred yardstick.
<h3>
	&#39;Smart Beta&#39;</h3>

	The last style of enhanced ETF index, or smart beta, is a cross between active and passive as a result of rules-based analysis of the underlying securities. Typically these funds analyze fundamental balance sheet characteristics, performance data and a host of other technical data.&nbsp;

	The goal is to create a semi-active ETF that is reevaluated and rebalanced on a regular (typically quarterly) basis to ensure the top securities within the index methodology are always included.

	One example of a smart beta-style fund is the iShares MSCI USA Momentum Factor ETF (NYSE: <a class="ticker" href="/stock/mtum#NYSE">MTUM</a>), which selects 125 stocks according to recent positive six- and 12-month price returns. Currently the top sectors in MTUM are healthcare, industrials and information technology, which are subject to change according to fluctuating market dynamics.

	Each style of index has significant merits that should be evaluated in the context of your investment goals, risk tolerance and time horizon. At some point, an investor may intentionally or inadvertently own a mix of all three depending on their style of investing.

Specialty ETFs

BOND

MTUM

Examining Your ETF: Active, Passive & 'Smart Beta' Indexes

Less than four years after the debut of its first exchange traded fund, discount broker Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) announced Thursday that its suite of 15 equity-based and bond ETFs has reached a combined $10.02 billion in assets under management. That number pertains to the firm's ETF AUM total as of February 8.

Schwab's first ETFs debuted in November 2009 and were immediately made available to the firm's clients on a commission-free basis. Since that time, California-based Schwab has leveraged the combination of commission-free trading and paltry expense ratios to become one of the fastest-growing U.S. ETF sponsors.

With $10.2 billion in ETF assets, Schwab is the tenth-largest U.S. ETF sponsor, just behind PIMCO, which has $10.3 billion in ETF assets. Three Schwab ETFs – the Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) and the Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) – combine for about 38 percent of the firm's ETF assets.

SCHX, which competes with the Vanguard Large Cap ETF (NYSE: <a class="ticker" href="/stock/vv#NYSE">VV</a>) among other funds, has $1.2 billion in AUM, <a href="https://www.schwabetfs.com/summary.asp?symbol=SCHX">according to Schwab data</a>. SCHF, which competes with the massive iShares MSCI EAFE Index Fund (NYSE: <a class="ticker" href="/stock/efa#NYSE">EFA</a>), has $1.1 billion in AUM. SCHB is Schwab's largest ETF with $1.6 billion in assets.

Schwab's largest bond ETF is the Schwab U.S. TIPS ETF (NYSE: <a class="ticker" href="/stock/schp#NYSE">SCHP</a>) with $602.4 million in AUM. All 15 of the firm's ETFs have over $100 million in asssets.

Earlier this month, Schwab unveiled its Schwab ETF OneSource platform, which allows its clients to buy and sell 105 ETFs with $0 online trade commissions. In additional Schwab ETFs, OneSource allows the firm's clients to trade ETFs from State Street Global Advisors, PowerShares, Guggenheim, ETF Securities and United States Commodity Funds commission-free.

For more on Schwab ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3314763/schwab-unveils-massive-additions-to-commission-free-etf-lineu">here</a>.

SCHP

Schwab ETFs Reach $10B in Combined Assets

Discount broker Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>), sponsor to some of the least expensive ETFs on the market, is making some of those funds even cheaper. In a filing with the <a href="http://www.sec.gov/Archives/edgar/data/1454889/000119312512398527/d403516d497.htm">Securities and Exchange Commission</a>, Schwab outlined fee cuts a wide array of its ETFs.

Among the Schwab funds with lower expense ratios will be two of the firm's most popular products. The Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) will see its fee reduced to 0.04 percent per year from 0.06 percent. The annual expense ratio on the Schwab U.S. Large-Cap ETF (NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>) goes to 0.04 percent from 0.08 percent. SCHB has $1.1 billion in assets under management while <a href="https://www.schwabetfs.com/summary.asp?symbol=SCHX">SCHX had $887.5 million in AUM at the end of August</a>.

The Schwab U.S. Large-Cap Growth ETF (NYSE: <a class="ticker" href="/stock/schg#NYSE">SCHG</a>), Schwab U.S. Large-Cap Value ETF (NYSE: <a class="ticker" href="/stock/schv#NYSE">SCHV</a>). Schwab U.S. REIT ETF (NYSE: <a class="ticker" href="/stock/schh#NYSE">SCHH</a>) and the Schwab U.S. Mid-Cap ETF (NYSE: <a class="ticker" href="/stock/schm#NYSE">SCHM</a>) will see annual fees reduced to 0.07 percent from 0.13 percent.

The Schwab U.S. Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scha#NYSE">SCHA</a>) goes down three basis points to 0.1 percent from 0.13 percent. In the dividend space, Schwab slashed the expense ratio on the Schwab U.S. Dividend Equity ETF (NYSE: <a class="ticker" href="/stock/schd#NYSE">SCHD</a>) to 0.07 percent from 0.17 percent.

Schwab also reduced expenses on several of its international funds, including the Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>), which is going to 0.09 percent from 0.13 percent. The Schwab International Small-Cap Equity ETF (NYSE: <a class="ticker" href="/stock/schc#NYSE">SCHC</a>) will now have an expense ratio of 0.2 percent down from 0.35 percent.

Interestingly, the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>) has lost the title of cheapest emerging markets ETF. That honor now goes to the Schwab Emerging Markets Equity ETF (NYSE: <a class="ticker" href="/stock/sche#NYSE">SCHE</a>), which will now charge 0.15 percent compared with 0.25 percent in the past.

Fees on the Schwab U.S. TIPS ETF (NYSE: <a class="ticker" href="/stock/schp#NYSE">SCHP</a>) were cut in half to 0.07 percent from 0.14 percent. The Schwab Short-Term U.S. Treasury ETF (NYSE: <a class="ticker" href="/stock/scho#NYSE">SCHO</a>) goes to 0.08 percent from 0.12 percent while the Schwab Intermediate-Term U.S. Treasury ETF (NYSE: <a class="ticker" href="/stock/schr#NYSE">SCHR</a>) will now charge 0.1 percent compared with 0.12 percent in the past.

The Schwab U.S. Aggregate Bond ETF (NYSE: <a class="ticker" href="/stock/schz#NYSE">SCHZ</a>) also cut its fees in half to 0.05 percent from 0.1 percent while the Schwab U.S. REIT ETF (NYSE: <a class="ticker" href="/stock/schh#NYSE">SCHH</a>) will now charge 0.07 percent, down from 0.13 percent. 

All that on top of the fact that Schwab offers all of its ETFs on a commission-free basis to its clients.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Sector ETFs

New ETFs

Pre-Market Outlook

SCHC

SCHD

SCHG

SCHH

SCHO

SCHR

SCHV

Schwab ETF Fees Hit Rock Bottom

The pace of new ETF issuance has slowed in 2012, but several new funds might be worth considering according to S&amp;P Capital IQ, which published a note that examined ETFs less than three-years-old.

Six funds were highlighted in the note, with four earning Overweight ratings and two garnering Market-weight ratings. 

"While down slightly from the 111 equity ETF new issues in the 12-month period ended July 2011, the most recent one-year figure is up from two periods ago," S&amp;P said. "We also see greater geographic diversification among the ETFs being issued: while the prior 12-month period saw a 60/40 split between U.S. and non-U.S. equities, the most recent 12 months saw those numbers practically reverse. Although lower in absolute numbers overall, this most recent period has seen absolute gains in the Global, Asia developed, and Europe developed regions, though only some of these funds receive a top rank of Overweight for combined performance, risk and cost factors."

One of the "new" ETFs that S&amp;P rates Overweight is the Market Vectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>), which is only new in its current form. Van Eck Global, the parent company of Market Vectors, acquired several of the old Merrill Lynch HOLDRs products in late 2011 and OIH was among that group. 

OIH re-emerged as a Market Vectors fund in December 2011 and is still the largest and most heavily traded ETF tracking oil services stocks such as Schlumberger (NYSE: <a class="ticker" href="/stock/slb#NYSE">SLB</a>), Halliburton (NYSE: <a class="ticker" href="/stock/hal#NYSE">HAL</a>) and National Oilwell Varco (NYSE: <a class="ticker" href="/stock/nov#NYSE">NOV</a>).

The Schwab U.S. Dividend Equity ETF (NYSE: <a class="ticker" href="/stock/schd#NYSE">SCHD</a>) also earned an Overweight rating from S&amp;P Capital IQ. With over $401 million in assets under management, SCHD is one of the more successful ETFs to come to market in the past year. The fund debuted in October 2011. SCHD charges 0.17 percent per year and its top-10 holdings include Wal-Mart (NYSE: <a class="ticker" href="/stock/wmt#NYSE">WMT</a>), Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>) and Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>).

The Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>) also landed an Overweight rating from S&amp;P. SCHB, which will turn three-years-old in November, is home to $1 billion in assets under management. The fund competes with the Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="/stock/vti#NYSE">VTI</a>) and the SPDR Dow Jones Total Market ETF (NYSE: <a class="ticker" href="/stock/tmw#NYSE">TMW</a>), among others.

S&amp;P has a Market-weight rating on the wildly popular PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>). The PowerShares S&amp;P 500 Low Volatility Portfolio was an early entrant to the low volatility ETF game and has since become the largest, drawing in over $2.2 billion in AUM since its May 2011 debut. 

As a low volatility fund, more than 60 percent of SPLV's weight is devoted to utilities and staples stocks. The fund charges 0.25 percent per year.

Another low volatility play, the iShares MSCI All Country World Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/acwv#NYSE">ACWV</a>), also received a Market-weight rating from S&amp;P. The iShares MSCI All Country World Minimum Volatility Index Fund, which debuted in October 2011, has $442 million under management. ACWV is home to 265 stocks with a 53 percent weight to the U.S. The fund charges 0.35 percent per year.

The Global X Norway ETF (NYSE: <a class="ticker" href="/stock/norw#NYSE">NORW</a>), the dominant ETF <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/06/2636695/not-even-norway-enor-norw">tracking one of Europe's steadier economies</a>, was also rated Overweight by S&amp;P. NORW, which will enjoy its second birthday in November, has $43.7 million under management. Norway's state-run oil firm Statoil (NYSE: <a class="ticker" href="/stock/sto#NYSE">STO</a>) and oil services provider SeaDrill (NYSE: <a class="ticker" href="/stock/sdrl#NYSE">SDRL</a>) combine for over 29 percent of NORW's weight.

ACWV

NORW

SDRL

PowerShares S&P 500 Low Volatility Portfolio

SPLV

S&P Likes Some "Young" ETFs

Some investors focus exclusively on large caps. Others prefer the risk and volatility associated with small caps. Still others enjoy the anonymity afforded by the hidden gem atmosphere of the mid-cap universe. And there are those that just need to have all three cap spectrums in their portfolios at all times.

For the indecisive among us, there are all cap ETFs, funds that are intended to give investors the best of all three cap worlds. On the surface, it might appear as though all cap ETFs aren't much different than total market ETFs, but some all cap plays serve specific niches that make them compelling in their own right.

Here are five all cap plays your broker probably forgot to tell you about.

First Trust Multi Cap Value AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fab#NYSE">FAB</a>):
The First Trust Multi Cap Value AlphaDEX Fund sure doesn't get much press for an ETF that is over four years-old and has almost $39 million in assets under management, but FAB has been fabulous this month, surging more than 20%. Home to almost 600 stocks, FAB gives double-digit sector allocations to five industry groups – technology, industrials, financials, consumer discretionary and energy. FAB is a buy above $29, the ETF's 200-day moving average.

Guggenheim China All Cap ETF (NYSE: <a class="ticker" href="/stock/yao#NYSE">YAO</a>):
Admittedly, the Guggenheim China All Cap ETF makes the list more because of title than actual all cap representation. YAO is home to over 190 stocks and $57.4 million in AUM, but the ETF's top-10 holdings are dominated by Chinese large-caps. That group accounts for roughly 44% of YAO's weight. It's not that mid caps and small caps are absent from YAO. They're not. Just know that you're getting more of large-cap fund than the title implies. YAO's chart looks strong and a run back to $26 could be in the cards.

iShares Russell 3000 Index Fund (NYSE: <a class="ticker" href="/stock/iwv#NYSE">IWV</a>):
OK, so the iShares Russell 3000 Index Fund doesn't hold 3,000 stocks. It holds 2,958 and a robust $3.1 billion in AUM. A very reasonable 0.2% expense ratio is another point in the ETF's favor. Technology, financials, consumer discretionary, health care, producer durables and energy all get double-digit allocations. Trading around $74, IWV could 8%-10% upside in the near-term.

First Trust Multi Cap Growth AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fad#NYSE">FAD</a>):
FAB has a growth counterpart in the form of the First Trust Multi Cap Growth AlphaDEX Fund. Both have expense ratios of 0.7%, but FAD is smaller with 531 stocks and $29.4 million in AUM. Even though this is a growth fund, the usual growth sectors don't weigh as heavily here as consumer discretionary and staples which combine for over 36% of FAD's weight. No stock receives an allocation of more than 0.54%.

Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>):
Just a few days shy of its second birthday, SCHB has accomplished a lot in that time as the ETF is home to almost $672 million in AUM. Even more impressive is an expense ratio of just 0.06%, which undercuts comparable funds from all rival firms. SCHB tracks an index that is home to 2,500 stocks, but the ETF itself currently holds 1,499 securities. Remember, SCHB is commission-free if you're a Schwab client.

Technicals

First Trust Multi Cap Value AlphaDEX Fund

First Trust Multi Cap Growth AlphaDEX Fund

Five All Cap ETFs Your Broker Forgot to Mention

Larry Swedroe <a href="http://www.indexuniverse.com/hot-topics/8922-swedroe-active-investing-a-waste-of-time.html">was interviewed</a> at IndexUniverse in a opportunity for him to continue his mantra about passive investing over active investing. He made some points that are hard to disagree with but I don't think are necessarily complete discussions of the issues. Decisions need to be well thought out which requires looking at the debate from all sides thoroughly and honestly and then picking what is right for you.
When asked why the debate between passive and active still even exists Swedroe says "it's simply not in Wall Street's interest, because they wouldn't be able to charge you big fees for active management." He goes on to note how much cheaper passive management is. These two points are correct, it is clearly in "Wall Street's" interest and passive is cheaper than active.
Actually it is in more than just Wall Street's interest. I'm not sure that a small RIA firm should correctly be thought of as being "Wall Street," I certainly don't think of our firm as being part of Wall Street but either way it is in my firm's interest and mine that people seek out active management. One aspect of the RIA function is to understand what the client needs, set a reasonable expectation of what can be delivered and then execute against that need/expectation combination. Failure to do would reasonably result in termination. It is in every RIA's interest to retain assets and the easiest way to do this is (repeated for emphasis) execute against the need/expectation combination.
<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/-iykXzDo3PLI/TXBERNbMNGI/AAAAAAAAD0E/bcDOpwiaCGI/s1600/whangerei%2Bdream.jpg"><img style="float: left; margin: 0pt 10px 10px 0pt; cursor: pointer; width: 320px; height: 240px;" src="http://3.bp.blogspot.com/-iykXzDo3PLI/TXBERNbMNGI/AAAAAAAAD0E/bcDOpwiaCGI/s320/whangerei%2Bdream.jpg" alt="" id="BLOGGER_PHOTO_ID_5580035000764216418" border="0" /></a>I don't think too many people would disagree with the above, even passive investors. Swedroe would perhaps doubt the ability to execute but not with the need to execute. The big macro is giving people the best chance you can for them to have enough when they need it. Well the need/expectation combination is not really about all alpha all the time it is about what the client needs versus what can be delivered and whether there is a reasonable match between the two. Someone who must get 20% per year without fail regardless of what the market does in order for their plan to work should not hire me. My answer to that person would be save more and spend less, a lot less.
As far as cheaper, index funds are often very cheap but are also used in active strategies by professionals (fee chargers) and do it yourselfers. Owning SPY as the only holding when it is above its 200 DMA and selling when it breaches the 200 DMA would be very cheap and very active. Cheap can be done with active strategies. Using the Schwab ETF (<a class="ticker" href="/stock/schb#">SCHB</a>) would be even cheaper--no commission and a smaller fee. We own SCHB for some clients.
One point he makes that is utterly useless is "the media needs you to tune in to hear what's the best stock to buy and which funds are hot, etc." There is a difference between active investing and speculating and he is blurring the line. Buying RIMM as a guess about an earnings report is not the same thing as doing due diligence on a company like Exxon Mobil, to pick a stock I've never owned, and deciding it is worthy of owning. I realize Bogleheads and the like say there is no difference but I believe there is plenty of evidence to the contrary.
Next nugget; "To me, the evidence is so overwhelming, that, while it's not impossible to beat the market, it's certain that so few people will succeed that it's not worth trying." Beating the market is an incomplete sentiment. All alpha all the time is of course very difficult and of course very few people will do this. Long time readers will have an idea of our results over the long term (specifics become a compliance issue). In almost seven years of compliant track record we've had some years where we outperformed and some years where we lagged but the long term success thus far is mostly attributable not to all alpha all the time but figuring out a couple of very big things to avoid. Some individual years our avoidances, so to speak, were the wrong trade but looked at over a period of years have been crucially important. Going down a lot less than the market, which I identified as a goal before the crisis and wrote about incessantly is not what most people think about in terms of "beating the market" but is very valid as a long term strategy.
Swedroe cites several investing luminaries who say that most people should own index funds. This is correct. But it is also correct that the vast majority of Americans have very little saved and very little inclination to study and follow markets. Swedroe is quote mining (kind of like data mining). Someone with $15,000 should probably own index funds--I put accounts of that size (adult children of clients is an example of this account size) in index funds. Someone with a couple hundred thousand and still accumulating should make an informed decision for themselves about whether or not to use index funds; maybe they should but maybe they shouldn't.
The picture; good friends of ours own a house in Northern New Zealand and that is their view. Joellyn and I went there in 2005 and stayed here most of the trip. They set up the photo for me and while I don't really drink beer during market hours (maybe a mocha instead) it does have the makings for a pretty good day. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-3448128897954200718?l=randomroger.blogspot.com' alt='' /></div>

The Active Passive Debate Rages On

As our week long conversation about efficient portfolio construction progresses, it could also be thought of as a discussion about Lazy Portfolios. Yesterday I got an email informing me that RBS came out with a Trendpilot ETN for gold, symbol TBAR (IndexUniverse also had an article about it). This is the third fund in the lineup and I think there could be more coming. There is one for the S&amp;P 500 with symbol TRND and one for the S&amp;P 400 with symbol TRNM. I wrote about TRND and TRNM <a href="http://www.thestreet.com/story/10991691/1/etns-to-avoid-a-full-bear-market-decline.html">for theStreet</a> if you want more details but basically the ETN replicates long exposure to the underlying when the underlying is above its 200 DMA and replicates t-bills when the underlying is below its 200 DMA.
Before getting into strategy, these are notes issued by a bank that is 80% owned by the UK government and while I don't think the central bank has propped them up only to later allow them to fail the facts of the issuer remain. Additionally, employing the 200 DMA strategy under the hood of the ETN is not plain vanilla, although it is plainer than if they were doing this in an ETF.
That out of the way, we have been talking for the last few days about very simplistic portfolios for people just starting out (the idea being you might be a person of influence on investing in your various social or professional circles) but we could also be talking about lazy portfolios too.
I've mentioned using the Schwab Large Cap ETF (<a class="ticker" href="/stock/schb#">SCHB</a>) and the Schwab Small Cap ETF (<a class="ticker" href="/stock/scha#">SCHA</a>) for certain accounts for being very cheap and because the commission is waived. In <a href="http://randomroger.blogspot.com/2011/02/narrow-exposure-getting-easier-to.html">yesterday's post</a> I posited that a portfolio consisting of SCHB, SCHA and the not-yet-listed Guggenheim ABC High Dividend ETF would allow for broad asset exposure along with the active decision of having avoided Europe and Japan. The fees for two of the funds (the Schwab ones) would be microscopic and there'd only be one $9 commission. This concept implemented as a lazy portfolio offers no defensive protection; the active plan of going defensive would make the portfolio un-lazy, so to speak.
Replacing SCHB with the large cap Trendpilot ETN would create a defensive strategy with in the mix but still allow for lazy to prevail. The mix would still have US large cap, US small cap along with (hopefully) broad exposure to Australia, Brazil and Canada. There would be two commissions to implement the portfolio and the Trendpilot expense ratio is 100 basis points when it is long the underlying which is huge in the context of a low fee portfolio and the last ten years notwithstanding this will be long the underlying the vast majority of the time. Some big chunk of the portfolio going on defense (referring to the portion allocated to the Trendpilot) would go a long way to missing the full brunt of down a lot; not the full drawdown, just a chunk of it which could be a difference maker.
Obviously I do not know if the Trendpilot is the answer. Clearly I am favorably disposed to the strategy but the product is brand new and I think the innovation is, at the very least, helpful and we know the ETP industry will continue to innovate thus democratizing many concepts that have not been easily accessible to people before.
Felix Salmon has had a string of articles lately really questioning why any individual participates in the stock market, <a href="http://seekingalpha.com/article/254583-why-do-we-want-stocks-to-go-up">here is one of his latest</a>. It is a worthwhile exploration but the conclusion should not be avoid the stock market so much as maybe be skeptical of it and figure out how to use it in such a way as to give yourself the best chance you can of getting what you want from it. To the extent this makes sense to you on some level, then your course of action will likely include strategic implementation of investment products. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-9170362765343382463?l=randomroger.blogspot.com' alt='' /></div>

Lazy Portfolio Evolves?

Long time reader WH made an interesting comment yesterday in response to the idea in <a href="http://randomroger.blogspot.com/2011/02/friday-randoms.html">yesterday's post</a> about the extent to which low savings rates and overspending are obstacles to financial plan success. He noted from the Felix Salmon article I linked to that Felix said that whatever the market does in your investing career you will probably do a little worse. WH noted the extent to which various fees and expenses associated with investing could be the biggest impediment to success. 
This sort of inefficient investing is certainly a huge obstacle but I don't think it is the biggest thing getting in the way of success. Intuitively, living a $100,000 lifestyle on $50,000 portfolio and repeated panic selling would seem to be more harmful.
Disirregardless (hat tip to my buddy Mikey who just became a father for the fourth time) of whether inefficiency is the biggest impediment or not, we all can benefit from a little more efficiency. One way to do this is the various free ETF trading programs that now exist. TD Ameritrade has about 100 ETFs, Fidelity has now 30 iShares funds that can be traded for free, Vanguard ETFs can be traded for free at Vanguard and Schwab ETFs can be traded for free at Schwab.
Below is the list of Schwab ETFs, there will probably be more than you think;
Schwab US TIPS ETF (SCHP) Schwab Short Term US Treasury ETF (SCHO) Schwab Intermediate US Treasury ETF (SCHR) Schwab US Broad Market ETF (<a class="ticker" href="/stock/schb#">SCHB</a>) Schwab US Large Cap ETF (<a class="ticker" href="/stock/schx#">SCHX</a>) Schwab US Large Cap Growth ETF (SCHG) Schwab US Large Cap Value ETF (<a class="ticker" href="/stock/schv#">SCHV</a>) Schwab US Mid Cap ETF (SCHM) Schwab US Small Cap ETF (<a class="ticker" href="/stock/schb#">SCHB</a>) Schwab US REIT ETF (SCHH) Schwab International Equity ETF (<a class="ticker" href="/stock/schf#">SCHF</a>) Schwab International Small Cap Equity ETF (SCHC) Schwab Emerging Markets ETF (SCHE)
Clients below a certain size own SCHB and SCHA and that is the point. Below a certain size it becomes even more important to minimize the number $8-$10 commissions. The Schwab roster of ETFs covers a lot of asset class ground. Someone with less than $50,000 could build the majority of their portfolio from that list and then add three or four things for narrower exposure and only have a commission drag of $36. Obviously this would be mostly a broad based portfolio but that is just fine for someone who would rather not spend a ton of time on this. The investor I have in mind might want to layer on one country fund, something like gold and maybe one stock they feel comfortable with. This seems pretty realistic to me, especially if they can be diligent savers, they can DCA in to these funds.
While the Schwab program is a more overt asset grab the TD Ameritrade program goes farther in terms of actually helping people (make no mistake, it is in asset grab too) by including quite a few iShares single country funds in its list of 101 ETFs. I would note that the expense ratio in the Schwab funds is lower than most of the funds in the Ameritrade program. Again though the program helps increase efficiency WRT to fees which becomes more important the smaller the accounts get and people just starting out will usually have smaller accounts, but now can get pretty good asset class diversification.
I should clarify one thing from the above paragraph. Spending $300 to implement a $1 million portfolio is not really an issue IMO but that would be a colossal drag on a $55,000 portfolio.
True to yesterday's post maybe today's post can count toward spreading the gospel to people who come to you for this sort of advice. 
<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8532070-6093908407802152336?l=randomroger.blogspot.com' alt='' /></div>

The Big Picture for the Week of February 20, 2011

Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) will lower expense ratios on six of is ETFs to go along with commission-fee trading that is available to Schwab accountholders.
The ETFs that will see lower fees are the Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>), Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG), Schwab U.S. Large-Cap Growth ETF (NYSE: SCHV), Schwab U.S. Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scha#NYSE">SCHA</a>), Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) and the Schwab Emerging Markets Equity ETF (NYSE: SCHE).
The expense ratio on SCHB will go to 0.06% from 0.08% and the fees on SCHG, SCHV, SCHA and SCHF will got to 0.13% from 0.15%. The fees on SCHE will be cut to 0.25% from 0.35%.
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Schwab Lowers Fees On Six 6 ETFs

ETFs issued by Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) have proven fairly popular with investors in just a few months on the market. Schwab's first four ETFs came to market in November and the firm introduced two more in December and two more in January.
The first four Schwab ETFs -- the Schwab U.S. Broad Market ETF (NYSE: <a class="ticker" href="/stock/schb#NYSE">SCHB</a>), the Schwab U.S. Large-Cap ETF(NYSE: <a class="ticker" href="/stock/schx#NYSE">SCHX</a>), the Schwab U.S. Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scha#NYSE">SCHA</a>) and the Schwab International Equity ETF (NYSE: <a class="ticker" href="/stock/schf#NYSE">SCHF</a>) were launched Nov. 3, 2009. The Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG) and the Schwab U.S. Large-Cap Value ETF (NYSE: SCHV) were launched on Dec. 11, 2009. The Schwab Emerging Markets Equity ETF(NYSE: SCHE) and the Schwab International Small-Cap Equity ETF (NYSE: SCHC) began trading on Jan. 14, 2010, according to a statement issued by Schwab.
The robust inflows may have been helped by Schwab offering commission free trades on its ETFs to Schwab clients. That offer is for online trades for account holders with balances of $1,000 or higher.

Schwab ETFs Top $1 Billion In Assets

There were 23 new ETFs and five new ETNs launched in November.  No products were delisted.  The net increase of 28 pushed the quantity of listed products to 908, the first time the count has been above 900.
In theory, each hundred new products should come quicker than the previous since it represents a smaller percentage increase.  However, it took 18 months for the list to grow from 800 to 900 while the climb from 700 to 800 took just four months.
<img class="aligncenter size-full wp-image-7206" title="ETP-listing-count-11-30-09" src="http://investwithanedge.com/wp-content/uploads/2009/12/ETP-listing-count-11-30-09.jpg" alt="ETP-listing-count-11-30-09" width="420" height="335" />
In fact, the 400, 500, 600, 700, and 800 levels were all eclipsed during the 18-month period prior to the one just completed.  In other words, new listings grew at only 15% over the past 18 months versus more than 100% in the previous 18-month span.
Even with that dramatic decline in the growth rate, the number of new listings in November was the highest in twelve months.  This was still far below the record of 50 launched in January 2007.  The pace is picking up once again but remains well below the rapid climb we saw from 2006-2008 when the number of products increased by 279% (an annualized growth rate of 56% per year).

<table class="wptable rowstyle-alt" id="wptable-49" cellspacing="1" cellpadding="2">
<thead>
<tr>
<th class="sortable" style="width:250px" align="left">November 2009 Month End</th>
<th class="sortable" style="width:70px" align="center">ETFs</th>
<th class="sortable" style="width:70px" align="center">ETNs</th>
<th class="sortable" style="width:70px" align="center">Total</th>
</tr>
</thead>
<tr>
<td style="width:250px" align="left">Currently Listed U.S.</td>
<td style="width:70px" align="center">819</td>
<td style="width:70px" align="center">89</td>
<td style="width:70px" align="center">908</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Listed as of 12/31/2008</td>
<td style="width:70px" align="center">760</td>
<td style="width:70px" align="center">85</td>
<td style="width:70px" align="center">845</td>
</tr>
<tr>
<td style="width:250px" align="left">New Introductions for Month</td>
<td style="width:70px" align="center">23</td>
<td style="width:70px" align="center">5</td>
<td style="width:70px" align="center">28</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Delistings/Closures for Month</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
<td style="width:70px" align="center">0</td>
</tr>
<tr>
<td style="width:250px" align="left">Net Change for Month</td>
<td style="width:70px" align="center">+23</td>
<td style="width:70px" align="center">+5</td>
<td style="width:70px" align="center">+28</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">New Introductions YTD</td>
<td style="width:70px" align="center">104</td>
<td style="width:70px" align="center">9</td>
<td style="width:70px" align="center">113</td>
</tr>
<tr>
<td style="width:250px" align="left">Delistings/Closures YTD</td>
<td style="width:70px" align="center">45</td>
<td style="width:70px" align="center">5</td>
<td style="width:70px" align="center">50</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">Net Change YTD</td>
<td style="width:70px" align="center">+59</td>
<td style="width:70px" align="center">+4</td>
<td style="width:70px" align="center">+63</td>
</tr>
<tr>
<td style="width:250px" align="left">On Deathwatch at End of Month</td>
<td style="width:70px" align="center">88</td>
<td style="width:70px" align="center">40</td>
<td style="width:70px" align="center">128</td>
</tr>
<tr class="alt">
<td style="width:250px" align="left">% on Deathwatch</td>
<td style="width:70px" align="center">10.7%</td>
<td style="width:70px" align="center">44.9%</td>
<td style="width:70px" align="center">14.1%</td>
</tr>
</table>

Notes: The ETF counts include MacroShares, which technically are not <a href="http://investwithanedge.com/the-soul-of-an-etf" target="_blank">ETFs</a>.  The new introductions and closings quantities do not include the <a href="http://investwithanedge.com/extreme-makeover-etf-edition" target="_blank">XGC extreme makeover</a> in July.
New products launched in November (in chronological order):
<ul>
<li>PIMCO 3-7 Year U.S. Treasury Index ETF (FIVZ) (<a href="http://investwithanedge.com/two-more-bond-etfs-from-pimco-fivz-and-zroz" target="_blank">article on FIVZ and ZROZ</a>)</li>
<li>PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ)</li>
<li>Schwab U.S. Broad Market ETF (SCHB) (<a href="http://investwithanedge.com/schwab-creates-watershed-event-with-commission-free-etfs" target="_blank">article on Schwab launch</a>)</li>
<li>Schwab U.S. Large-Cap ETF (SCHX)</li>
<li>Schwab U.S. Small-Cap ETF (SCHA)</li>
<li>Schwab International Equity ETF (SCHF)</li>
<li>TXF Large Companies ETF (TXF) (<a href="http://investwithanedge.com/texas-etf-begins-trading-txf" target="_blank">article on TXF</a>)</li>
<li>Market Vectors Junior Gold Miners ETF (GDXJ) (<a href="http://investwithanedge.com/well-timed-launch-for-new-junior-gold-etf-gdxj" target="_blank">article on GDXJ</a>)</li>
<li>iShares Diversified Alternative Trust (ALT) (<a href="http://investwithanedge.com/ishares-launches-its-first-alpha-seeking-etf" target="_blank">article on ALT</a>)</li>
<li>IQ ARB Merger Arbitrage ETF (MNA) (<a href="http://investwithanedge.com/three-new-etfs-on-tuesday-mna-mint-bab" target="_blank">article on MNA, MINT, and BAB</a>)</li>
<li>PIMCO Enhanced Short Maturity Strategy Fund (MINT)</li>
<li>PowerShares Build America Bonds Portfolio (BAB)</li>
<li>First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID) (<a href="http://investwithanedge.com/smart-grid-etf-launched-by-first-trust-advisors" target="_blank">article on GRID</a>)</li>
<li>United States 12 Month Natural Gas Fund (UNL) (<a href="http://investwithanedge.com/will-unl-work-better-than-ung" target="_blank">article on UNL</a>)</li>
<li>Barclays S&amp;P 500 3x Long 2009 ETN+ (BXUB) (<a href="http://investwithanedge.com/barclays-launches-no-reset-leveraged-etns" target="_blank">article on new ETN+ products</a>)</li>
<li>Barclays S&amp;P 500 2x Long 2009 ETN+ (BXUC)</li>
<li>Barclays S&amp;P 500 1x Short 2009 ETN+ (BXDB)</li>
<li>Barclays S&amp;P 500 2x Short 2009 ETN+ (BXDC)</li>
<li>Barclays S&amp;P 500 3x Short 2009 ETN+ (BXDD)</li>
<li>iShares S&amp;P India Nifty 50 Index Fund (INDY) (<a href="http://investwithanedge.com/india-nifty-50-etf-launched" target="_blank">article on INDY</a>)</li>
<li>Vanguard Short-Term Government Bond ETF (VGSH) (<a href="http://investwithanedge.com/vanguard-launches-new-bond-etfs" target="_blank">article on new Vanguard ETFs</a>)</li>
<li>Vanguard Intermediate-Term Government Bond ETF (VGIT)</li>
<li>Vanguard Long-Term Government Bond ETF (VGLT)</li>
<li>Vanguard Short-Term Corporate Bond ETF (VCSH)</li>
<li>Vanguard Intermediate-Term Corporate Bond ETF (VCIT)</li>
<li>Vanguard Long-Term Corporate Bond ETF (VCLT)</li>
<li>Vanguard Mortgage-Backed Securities ETF (VMBS)</li>
<li>Market Vectors Poland ETF (PLND) (<a href="http://investwithanedge.com/us-investors-now-have-direct-access-to-poland" target="_blank">article on PLND</a>)</li>
</ul>
Product closures/delistings in November:
None
Previous ETF monthly statistics reports are available <a href="http://investwithanedge.com/category/etf-statistics" target="_blank">here</a>.
Disclosure covering writer, editor, and publisher: Long GDXJ.  No positions in any of the other securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
<img src="http://investwithanedge.com/?ak_action=api_record_view&amp;id=7201&amp;type=feed" alt="" />

ETF Stats for November 2009: Active Listings at 908

Can it be true? Are there ETFs that not only have low expense fees and can be bought and sold at will, but also are free to trade with no commissions?!
The answer is yes...
Charles Schwab is the first brokerage to unveil 'free ETFs', that for Schwab customers who trade on-line will be free to trade with no restrictions. This is boon to individual investors and advisors who had to choose between the transaction costs of ETFs or the higher management and marketing fees of mutual funds. 
Schwab's first 4 free ETFs were introduced yesterday, U.S. Broad Market (NYSE: SCHB), U.S. Large-Cap (NYSE: SCHX), U.S. Small-Cap (NYSE: SCHA) and International Equity (NYSE: SCHF). 4 additional free ETFs will be launched in early December. 
If other brokerage houses follow suit, this would be huge change to the industry and should inflict a big blow to the mutual fund and traditional ETF industries.

Commission Free ETFs: Too Good To Be True? (SCHB, SCHX, SCHA, SCHF)

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Schwab U.S. Broad Market ETF

Overview

Schwab U.S. Broad Market ETF (ARCA:SCHB), Quote.Headers.trade-ideas