Exchange Traded Fund
Our previous look at Nov 6 compared spot and futures. This time, let’s look at gold futures and GLD.
Thousands of investors with stop-loss orders on their ETFs saw those positions crushed in the first 30 minutes of trading last Monday, August 24th. Seeing a price blow right through your stop is perhaps the worst experience in all of investing because it seems like such a betrayal. “Hey, isn’t this what a smart investor is supposed to do? What do you mean there was no liquidity at my stop? What do you mean I got filled $5 below my stop? Wait… now the price is back above my stop! Is this for real?” Welcome to the Big Leagues of Investing Pain.
You don’t hear it much, but the S&P 500 has been a bit of a “One trick pony” in 2015. No, it isn’t the 4% weighting in Apple that makes it such; it is the combination of a 15% weighting in Health Care AND that sector’s 12.9% return year to date. When you compare the S&P 500’s price return year to date of 3.37%, you can see that the Health Care sector’s contribution is essentially just over half the market’s price return for 2015 (12.9 times 15% is 1.90 of that 3.37). Layer on the fact that 5 of the 10 industry sectors in the S&P 500 are still down on the year: Materials (-2.7%), Industrials (-2.9%), Telecomm (-0.7%), Utilities (-8.6%) and Energy (-9.7%).
"A surprise move by Vanguard to include onshore Chinese A-shares in its flagship emerging market fund will “put pressure” on other asset managers to follow suit," FT reports.
Happy Saint Patricks Day ! Thanks to all ZeroHedge readers for interaction, shares and indeed business.
New Gold Fix To Be Run By Western and Chinese Banks - Still Not Transparent -- Replacement for the near-century-old London gold fix will start in March -- London gold fix to Shanghai gold fix - still not transparent --Stealth run on the London bullion market continuing?
Germans can’t get their gold reserves. Do how did the Dutch get their 122 tonnes of gold?
Is Germany being prevented from holding gold to prevent independent foreign policy action?
Big Banks Take Huge Stakes In Aluminum, Petroleum and Other Physical Markets ... Then Manipulate Their PricesSubmitted by George Washington on 11/27/2014 15:08 -0500
Giant Banks Take Over Real Economy As Well As Financial System … Enabling Manipulation On a Vast Scale
The last six months have not run according to anyone’s plan. Who would have thought that equity market structure would yield a best-selling book, after all? As ConvergEx's Nick Colas notes, on the fundamental side of things, interest rates across the developed world are lower, not higher – counter to the consensus view just 180 days ago. Mutual fund investors first bought U.S. equities earlier in the year, then in the last 6 weeks have begun to liquidate in earnest. Exchange Traded Fund investors are buying more fixed income products than those dedicated to U.S. stocks. Large cap stocks are trouncing small caps in terms of performance. And as for volatility – well, Elvis has clearly left the building on that one. So which of these surprises has staying power into the back half of 2014?
For many months we have discussed the massive outperformance that buying the "most shorted" stocks has created. The 'alpha' generated fro buying the weakest balance sheet companies in preference of the stronger has enabled the dash-for-trash strategy (just as we saw yesterday when Tepper unleashed hell) to be the new meme. And so it is, like anything that is popular, ETFTrends reports that ETFis - a turnkey ETF provider - has filed with the SEC to launch an actively managed short squeeze fund...
When is marginable collateral not marginable collateral? When it is an ETN, or Exchange Trade Note: the cousin of the Exchange Traded Fund (ETF). The very mutated, and unabashedly evil cousin of the ETF that is. At least such is the view of US brokerage Interactive Brokers " Pursuant to a recent decision by FINRA whereby Exchange Traded Notes (ETNs) will no longer be eligible for Portfolio Margining, these securities, including options having an ETN as an underlying, will be phased out of the program by OCC during the week of May 19, 2014."
Concerns about the possibility of the Chinese property bubble bursting affecting economic growth in China and the world is supporting gold.
Just over a year ago, in one simple graphic, we showed why Bridgewater, which currently manages around $150 billion, is the world's biggest hedge fund. Quite simply, its flagship $80 billion Pure Alpha strategy had generated a 16% annualized return since inception in 1991, with a modest 11% standard deviation - returns that even Bernie Madoff would be proud of. And, true to form, according to various media reports, Pure Alpha's winning ways continued in 2013, when it generated a 5.25% return: certainly underperfoming the market but a respectable return nonetheless. However, Pure Alpha's smaller cousin, the $70 billion All Weather "beta" fund was a different matter in the past year. The fund, which touts itself as "the foundation of the "Risk Parity" movement", showed that in a centrally-planned market, even the best asset managers are hardly equipped to deal with what has largely become an irrational market, and ended the year down -3.9%.
There are only a few UK and U.S. banks on the list of global safe banks. This should give pause for thought. Notice that many of the safest banks in the world are in Switzerland and Germany.
It is important that one owns physical gold and not paper or electronic gold which could be subject to bail-ins. Owning a form of paper gold and derivative gold such as an exchange traded fund (ETF) in which one is an unsecured creditor of a large number of custodians, who are banks which potential could be bailed in, defeats the purpose of owning gold.
Physical Gold, held in secure conferring outright legal ownership through bailment remains the safest way to own gold.