Investing with Intelligent ETFs: Strategies for Profiting from the New Breed of Securities

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 2008-09-12
  • Publisher: McGraw-Hill Education
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The first book of its kind,Investing with Intelligent ETFsscrutinizes one of the most innovative and popular investment securities on the financial market today. Attracted to ETFs' built-in diversification and their flexibility regarding trading and investing styles, high-level investors have been flocking to them for several years. At the present time, there are 646 ETFs, containing $620 billion in assets, and the types of strategies used are continually growing. ..Max Isaacman, author of the groundbreaking.How to be an Index Investor, offers a timely analysis that provides a close look at the intelligent ETFs available today, explaining how to use the latest securities and indexes to add risk-adjusted gain (alpha) to your portfolio. He introduces you to the various ETF providers and supplies the information you'll need about the many securities variations, including the most complex and specialized. You'll learn how to invest in: .. New intelligent ETFs that use quantitative measurements to beat the market. Fundamentally weighted ETFs, which at times outperform cap-weighted ETFs. Passive ETFs for sector representation and market participation. BRIC (Brazil, Russia, India, China) ETFs, from the fastest growing economies in the world ..Investing with Intelligent ETFsexplains how these and other ETFs are constructed, and why they are superior to stocks and mutual funds. Illustrating strategies previously available only to professional investors, it helps you maximize your leverage and versatility in today's increasingly complex but profitable global market. With this thorough, insightful book, you can participate in new innovative investment strategies with all the knowledge and confidence you'll need.

Author Biography

Max Isaacman is a former member of thePresident’s Club at Merrill Lynch and VP at Lehman Brothers. He is theauthor of McGraw-Hill’s How to Be An Index Investor (0-07-135683-5).

Table of Contents

Forewordp. xv
Acknowledgmentsp. xxi
Introductionp. 1
The New ETFsp. 1
Searching for Alphap. 2
The Index Revolutionp. 4
Intelligent Index Performancep. 5
Using Alpha in Market Strategiesp. 8
Trading and Investing with ETFsp. 15
Explaining Exchange-Traded Fundsp. 17
Advantages of Trading and Investing in ETFsp. 18
The Creation and Redemption Processp. 22
Tax Considerationsp. 26
ETFs and Mutual Fund Tax Consequencesp. 28
Market Makers and Specialistsp. 28
Harvesting Tax Losses Using ETFsp. 29
Investing in a Rapidly Changing Worldp. 33
Gavekal's Viewp. 34
What Revolution Are We In?p. 36
The "Platform" Operating Modelp. 37
The Growing U.S. Strength Using the Platform Modelp. 42
The Present Economic Agep. 43
Types of Developing Growthp. 44
The New Global Manufacturing Processp. 48
The High Margins of the Platform Methodp. 49
Lower Stock Market and GDP Volatilityp. 49
The Lower U.S. Household Savings Ratep. 51
The U.S. Balance-of-Trade Deficitp. 53
Continued Global Expansionp. 55
The Shrinking Middle Classp. 56
PowerSharesp. 59
Using Intelligent ETFsp. 60
The Intellidex Indexp. 61
Sector Considerationp. 64
The Intellidex Approach and Attributionp. 66
Intelligent Indexes in Relation to Stock Pickingp. 68
Development of the Intellidex Indexp. 71
False Signals and Intuitive Stock Selectionp. 73
Factors Included in the Intellidex Modelp. 74
The Intellidex Index Stock-Picking Modelp. 74
Intellidex Compared to Other Quantitative Approachesp. 76
Intellidex Compared to Fundamentally Weighted Indexesp. 78
Intelligent ETFs Expand to the Global Marketplacep. 78
Ways to Weight Indexesp. 81
Research Affiliates and Fundamental Weightingp. 82
Are Markets Efficient?p. 83
The Importance of Choosing Asset Classesp. 84
The Performance-Drag Problemp. 87
Fixing the Performance-Drag Problemp. 89
Measuring Company Worthp. 90
Creating Index Portfolios of Unique Characteristicsp. 91
Stock Rotation in Different Weighted Indexesp. 93
Fundamental and Capitalization Weighting in Sector Weightingp. 96
Rydex Investmentsp. 101
The Rydex CurrencySharesp. 101
How Rydex CurrencyShares Trusts Are Structuredp. 103
Advantages of the Rydex CurrencySharesp. 104
Other Rydex CurrencySharesp. 105
Taxes and Rydex CurrencySharesp. 106
Noncorrelation to the Stock Marketsp. 106
Rydex ETFsp. 107
Shortcomings in the Modern Portfolio Theory of Investingp. 108
Rydex S&P Equal Weight ETFp. 109
Past Limitation of the Mutual Fund Structurep. 110
The Effect of Equal Weight Exposure to the Cap-Size Market Segmentp. 111
Stock Pickers Gravitate to RSPp. 112
The Russell Top 50 ETFp. 113
Rydex Style ETFsp. 114
Rydex Equal Weight Sector ETFsp. 115
The Rydex Equal-Weighted Technology Sector ETFp. 116
Keeping the Creation and Redemption Process Tax Efficientp. 117
Results of the RSP Creation and Redemption Processp. 118
ProSharesp. 121
Indexing Is Filling a Needp. 121
Advantages of ProSharesp. 122
The Changing Role of ETFsp. 123
Increasing Exposure through ProSharesp. 124
Gaining Diversification Using ProSharesp. 125
Using Magnified ETFs for Sector Diversificationp. 126
Shorting Sectors with ProSharesp. 127
Market Cap-Size Hedging through ProSharesp. 128
How Does ProShares Achieve Magnified Results?p. 128
How ProShares Achieves Magnified Returnsp. 129
Costs to the ETF Buyerp. 130
Short and UltraShort Market Capp. 131
Wisdom Treep. 141
Advantages of Dividend-Weighted Indexesp. 141
Transparency of Cash Dividendsp. 143
Criteria for Dividend-Weighted Index Inclusionp. 143
Wisdom Tree: Index Creator and ETF Sponsorp. 144
International and Domestic Dividend Indexingp. 145
Wisdom Tree Methodology and Transparencyp. 148
International Wisdom Tree Returnsp. 149
The Origin and Growth of Intelligent ETFsp. 153
The Role of the American Stock Exchange (AMEX) in the ETF Revolutionp. 154
The Start of the Intelligent Revolutionp. 154
The Changing ETF Scenep. 156
Modified Cap-Weighted Indexes and Specialized ETFsp. 157
Modified Cap-Weighting Methodsp. 157
Accomplishing Weighting Diversification in Indexesp. 158
Newer and Unique ETFsp. 159
Environmental Services ETFp. 162
Van Eck Steel ETFp. 163
Van Eck Russia ETFp. 165
Global Alternative Energy ETFp. 167
Van Eck Weighting Methodologyp. 168
Claymore Securitiesp. 171
Claymore/Zacks Yield Hog ETFp. 171
Claymore/Sabrient Stealth ETFp. 173
Claymore/Sabrient Insiderp. 174
Claymore/Robeco Developed International Equity ETFp. 176
The Varied Claymore ETF Approachp. 177
Claymore BRIC ETFp. 178
Claymore S&P Global Water Index ETFp. 180
The Claymore Oil Sands Sector ETFp. 181
The Claymore/Ocean Tomo Patent ETFp. 182
Claymore/Zacks Sector Rotation ETFp. 183
Claymore ETF Historyp. 184
Specialized ETF Approachesp. 187
First Trust Portfoliosp. 187
First Trust Portfolios' ETFsp. 188
AlphaDEX Enhanced Index ETF Seriesp. 189
Ways to Weight and Add Intelligence to Indexingp. 190
ETF Approaches in the Information Technology Groupp. 192
Looking Forward to the Future of the Tech Sectorp. 195
ETF Representation in the Tech Sectorp. 196
The Importance of Investing in Emerging Marketsp. 201
Currency Risks of Investing in Foreign ETFsp. 203
The Major Emerging Market: Chinap. 203
The Safety of ETF Investingp. 210
The Future of the ETF Marketp. 212
Indexp. 215
Table of Contents provided by Ingram. All Rights Reserved.

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