best etf for 2016 This is a topic that many people are looking for. newyorkcityvoices.org is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, newyorkcityvoices.org would like to introduce to you Vanguard s ETF Ideas for 2016: Limit Orders, Backtesting, Active ETFs. Following along are instructions in the video below:
“Dickson. Let s talk about some etf ideas for 2016. And the first one is is the use of limit orders. Because this is something which goes up people a of trouble back in august of this year.
Yeah so it s not so much an etf issue as as opposed to how to trade the etf and you know best practices. When you think about trading etfs is to use limit orders to give yourself some price protection a lot of people tend to use market orders or even stop loss orders and the problem with that is when you get into a big. Market. Volatility environment like we had on august 24th.
The market order says execute at any price immediately. And you don t want to execute an etf at any price you want to execute it at the price that s representative of its underlying securities so use those limit orders to help protect yourself when trading another big buzz term in 2015. Was smart beta. So how smart was smart beta in 2015.
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And will continue to be smart in 2016. Look smart beta is the etf version of active management. It s basically taking active strategies. Putting it into an index form and now all of a sudden saying that it s better.
But it s just the historical active passive debate. You re certainly gonna see more smart beta or more active strategies in the form of index products. The smart. Though of smart beta to me.
It s an acronym for a silly moniker for active rules. Based trading. And know what it is do the due diligence is it a strategy. One in your portfolio well some due diligence when it comes to etfs is back testing.
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We had a whole lot of new etfs in 2015. You talk about how investors can look into the back tests of etf. Sometimes. They don t even provide it yeah.
When new etfs are created they re often tracking new indexes in fact. I did some research. A couple of years ago. That showed that 60 of etfs coming to market.
We re tracking an index that was less than six months old. So how do you do that well you take a strategy. You say how would it have performed historically and then offer that with the hope that the back tested approach would continue in the future providers etf providers. Generally can t show back tested data.
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But the index providers. The ones that have developed those indexes four of the etf s often can and they re the the rub. If you will is that you tend to only see indexes or strategies that have performed well historically coming to market in the form of new etfs in other words. It s kind of like rearview mirror.
Investing all right let s talk about performance vanguard. Which is almost synonymous with index investing. It s actually working on some active etfs can you talk about your progress in your plans for those. Well.
I mean vanguard has always been about low cost investing whether it be in index or active form and we do have an application on file with the sec to launch or at least to get exemptive relief for active etfs in the us. And we just actually today december. 10th launched some active etfs in europe. So it s it s part of our overall approach to the etf market.
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All right and then finally there was a fight this year between larry fink and carl icahn over the safety of high yield bond etfs. Where do you come out on that our fixed income etf safe and specifically high yield. I give you so fixed income etfs actually have shown a lot of ability to provide price discovery when the underlying securities in the fixed income space tend to not trade as well as say equities do and that price discovery mechanism through the etf form has actually been very beneficial for fixed income investors in knowing where those types of securities may be priced. But again back to sort of the first question of you know when you re trading.
These though you need to be careful about using limit orders and knowing in what sort of band. If you will the etf should be valued all right well thanks a lot joe latexing. Thank you and thank you ” ..
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