Archive for January, 2010

This and That: Getting rich off Rich Dad, “teaser” interest rates and more…

January 28, 2010

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  1. The upcoming episode of CBC’s consumer watchdog show Marketplace (Fridays 8:30 p.m. in most of Canada) promises to be interesting. Host Erica Johnson finds out who is really getting rich through “free” Rich Dad real estate seminars. (Hint: It ain’t the seminar attendees).
  2. If you thinking about opening up a TFSA high-interest savings account, check out the fine print. Rob Carrick points out that many financial institutions are offering “teaser” interest rates that will revert to a much lower rate in the future.
  3. Mark Hulbert reports in The New Times on a new study that found that an actively-managed fund has to outperform the index by 4.3% annually before expenses just to break even net of expenses.
  4. Kevin Press of Today ‘s Economy Blog shares observations gleaned from an interview with Gail Vaz-Oxlade.
  5. You’ll hear gold bugs often going on about the inherent value in the yellow metal. Michael James doesn’t buy that and says just like money, gold only has value because we agree that it has value.
  6. Million Dollar Journey featured a guest post on six relatively painless way you can cut costs but keep the Latte Factor in your life.
  7. Thicken My Wallet has a valuable tip: make sure you shred all your personalized junk mail such as credit card offers.
  8. Preet puts on his thinking cap and debates what happens when you inversely weight the components in a capitalization-weighted index.
  9. The Intelligent Speculatorreports that new leveraged ETFs in the works plan to use monthly rebalancing to provide better tracking for long(er)-term investors.
  10. Canadian Financial DIY discovers that post-dated cheques and stopped cheques can cause you considerable grief.

I’m unable to highlight all the articles worth checking out in my weekly round up but you can check them out through my Twitter feed. Hope everyone had a great weekend!

Six new ETFs from iShares

January 28, 2010

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Vendors are cranking out ETFs faster than you can keep up with them. iShares Canada has added the following six ETFs to its existing line up:

  1. The iShares MSCI Brazil Index Fund (TSX:XBZ) holds the US-listed ETF of the same name (NYSE Arca: EWZ) and tracks the Brazilian stock market. The MER is 0.75%.
  2. The iShares S&P Latin America 40 Index Fund (TSX: XLA) again holds the US-listed ETF of the same name (NYSE Arca: ILF) and tracks markets in Latin America. The fund has a 61% allocation to Brazil, a 23% allocation to Mexico and 11% allocation to Chile. The MER is 0.65%.
  3. The iShares S&P CNX Nifty India Index Fund (TSX: XID) holds the US-listed iShares S&P India Nifty 50 Index Fund (NASDAQ: INDY). The Nifty 50 index tracks the performance of stocks listed on India’s National Stock Exchange. The MER is 0.98%.
  4. The iShares China Index Fund (TSX: XCH) holds the US-listed iShares FTSE / Xinhua China 25 Index Fund (NYSE Arca: FXI). FXI is a popular ETF with investors wanting to add exposure to the Chinese stock market. The MER is 0.85%.
  5. The other two ETFs introduced by iShares offer currency-neutral exposure to the US fixed income sector. iShares U.S. IG Corporate Bond Index Fund (TSX: XIG) holds the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE Arca: LQD) and offers a currency-hedged exposure to US investment grade corporate bonds. The MER is 0.30%.
  6. The iShares U.S. High Yield Bond Index Fund (TSX: XHY) holds the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE Arca: HYG) and offers a currency-hedged exposure to US junk bonds.

It is interesting to note that the new iShares Emerging Market ETFs do not hedge the currency exposure but still charge a 0.10% to 0.15% extra fee simply to hold another US-listed ETF. Assuming an investor wants to add China or India to their portfolio, why wouldn’t they simply buy the US-listed version and save a fraction of the fees?

The Card Game on PBS

January 27, 2010

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PBS aired a Frontline documentary called The Card Game tonight. The documentary, originally broadcast last Fall, provides a revealing glimpse into the practices employed by the credit card and banking industry to snare customers into a web of fees and sky-high interest charges. Funnily, it seemed to me that the pay day loan operation featured in the story appeared to be the least sleaziest of the lot. It also occurred to me that whatever regulations are put in, the industry would find ways to operate around it and the best way to keep these wolves from the door is to use credit responsibly.