Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net INVESTING WITH Intelligent ETFs Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net This page intentionally left blank Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net INVESTING WITH Intelligent ETFs Strategies for Profiting from the New Breed of Securities BY MAX ISAACMAN New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net Copyright © 2008 by Max Isaacman. All rights reserved. Manufactured in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.
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Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net Copyright © 2008 by Max Isaacman. Click here for terms of use. This page intentionally left blank Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net For more information about this title, click here CONTENTS Foreword xv Acknowledgments xxi Introduction 1 The New ETFs 1 Searching for Alpha 2 The Index Revolution 4 Intelligent Index Performance 5 Using Alpha in Market Strategies 8 Trading and Investing with ETFs 15 Chapter | 1 Explaining Exchange-Traded Funds 17 Advantages of Trading and Investing in ETFs 18 The Creation and Redemption Process 22 Tax Considerations 26 ETFs and Mutual Fund Tax Consequences 28 Market Makers and Specialists 28 Harvesting Tax Losses Using ETFs 29 Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net viii • Contents Chapter | 2 Investing in a Rapidly Changing World 33 Gavekal’s View 34 What Revolution Are We In? 36 The “Platform” Operating Model 37 The Growing U. Strength Using the Platform Model 42 The Present Economic Age 43 Types of Developing Growth 44 The New Global Manufacturing Process 48 The High Margins of the Platform Method 49 Lower Stock Market and GDP Volatility 49 The Lower U.
Household Savings Rate 51 The U. Balance-of-Trade Deficit 53 Continued Global Expansion 55 The Shrinking Middle Class 56 Chapter | 3 PowerShares 59 Using Intelligent ETFs 60 The Intellidex Index 61 Sector Consideration 64 The Intellidex Approach and Attribution 66 Intelligent Indexes in Relation to Stock Picking 68 Development of the Intellidex Index 71 False Signals and Intuitive Stock Selection 73 Factors Included in the Intellidex Model 74 The Intellidex Index Stock-Picking Model 74 Intellidex Compared to Other Quantitative Approaches 76 Intellidex Compared to Fundamentally Weighted Indexes 78 Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net Contents • ix Intelligent ETFs Expand to the Global Marketplace 78 Chapter | 4 Ways to Weight Indexes 81 Research Affiliates and Fundamental Weighting 82 Are Markets Efficient? 83 The Importance of Choosing Asset Classes 84 The Performance-Drag Problem 87 Fixing the Performance-Drag Problem 89 Measuring Company Worth 90 Creating Index Portfolios of Unique Characteristics 91 Stock Rotation in Different Weighted Indexes 93 Fundamental and Capitalizaton Weighting in Sector Weighting 96 Chapter | 5 Rydex Investments 101 The Rydex CurrencyShares 101 How Rydex CurrencyShares Trusts Are Structured 103 Advantages of the Rydex CurrencyShares 104 Other Rydex CurrencyShares 105 Taxes and Rydex CurrencyShares 106 Noncorrelation to the Stock Markets 106 Rydex ETFs 107 Shortcomings in the Modern Portfolio Theory of Investing 108 Rydex S&P Equal Weight ETF 109 Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net x • Contents Past Limitation of the Mutual Fund Structure 110 The Effect of Equal Weight Exposure to the Cap-Size Market Segment 111 Stock Pickers Gravitate to RSP 112 The Russell Top 50 ETF 113 Rydex Style ETFs 114 Rydex Equal Weight Sector ETFs 115 The Rydex Equal-Weighted Technology Sector ETF 116 Keeping the Creation and Redemption Process Tax Efficient 117 Results of the RSP Creation and Redemption Process 118 Chapter | 6 ProShares 121 Indexing Is Filling a Need 121 Advantages of ProShares 122 The Changing Role of ETFs 123 Increasing Exposure through ProShares 124 Gaining Diversification Using ProShares 125 Using Magnified ETFs for Sector Diversification 126 Shorting Sectors with ProShares 127 Market Cap-Size Hedging through ProShares 128 How Does ProShares Achieve Magnified Results? 128 How ProShares Achieves Magnified Returns 129 Costs to the ETF Buyer 130 Short and UltraShort Market Cap 131 Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net Contents • xi Chapter | 7 WisdomTree 141 Advantages of Dividend-Weighted Indexes 141 Transparency of Cash Dividends 143 Criteria for Dividend-Weighted Index Inclusion 143 WisdomTree: Index Creator and ETF Sponsor 144 International and Domestic Dividend Indexing 145 WisdomTree Methodology and Transparency 148 International WisdomTree Returns 149 Chapter | 8 The Origin and Growth of Intelligent ETFs 153 The Role of the American Stock Exchange (AMEX) in the ETF Revolution 154 The Start of the Intelligent Revolution 154 The Changing ETF Scene 156 Modified Cap-Weighted Indexes and Specialized ETFs 157 Modified Cap-Weighting Methods 157 Accomplishing Weighting Diversification in Indexes 158 Newer and Unique ETFs 159 Environmental Services ETF 162 Van Eck Steel ETF 163 Van Eck Russia ETF 165 Global Alternative Energy ETF 167 Van Eck Weighting Methodology 168 Chapter | 9 Claymore Securities 171 Claymore/Zacks Yield Hog ETF 171 Claymore/Sabrient Stealth ETF 173 Claymore/Sabrient Insider 174 Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net xii • Contents Claymore/Robeco Developed International Equity ETF 176 The Varied Claymore ETF Approach 177 Claymore BRIC ETF 178 Claymore S&P Global Water Index ETF 180 The Claymore Oil Sands Sector ETF 181 The Claymore/Ocean Tomo Patent ETF 182 Claymore/Zacks Sector Rotation ETF 183 Claymore ETF History 184 Chapter | 10 Specialized ETF Approaches 187 First Trust Portfolios 187 First Trust Portfolios’ ETFs 188 AlphaDEX Enhanced Index ETF Series 189 Ways to Weight and Add Intelligence to Indexing 190 ETF Approaches in the Information Technology Group 192 Looking Forward to the Future of the Tech Sector 195 ETF Representation in the Tech Sector 196 Chapter | 11 The Importance of Investing in Emerging Markets 201 Currency Risks of Investing in Foreign ETFs 203 The Major Emerging Market: China 203 The Safety of ETF Investing 210 The Future of the ETF Market 212 Index 215 Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net DISCLAIMER I own ETFs for myself and also for my clients, and I have written about many of these in this book. There are risks in investing in ETFs and in the stock and bond markets. There are no guarantees you will make money in the stock markets, and everyone knows you could lose money.
Most ETFs covered in this book are those that are constructed using equity securities. Other ETFs described employ derivatives and other instruments to attempt to replicate, before fees and expenses, the per- formance of an index or price changes of a currency. This book gives no legal or tax advice. Every investor and trader has his or her own risk profile and objectives.
Read the prospectus of the ETFs you are interested in, which can usually be downloaded from the ETF maker’s Web site. Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net Copyright © 2008 by Max Isaacman. Click here for terms of use. This page intentionally left blank Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net FOREWORD xchange-Traded Funds (ETFs) are one of the most innovative E and exciting financial products ever introduced.
ETFs borrow some of the best features of stock and mutual fund investing to offer a broadly distributed portfolio management and trading tool that has transformed the way we invest. When Max asked me to write the Foreword for this book in which he examines many of the new ETF products to bring them into focus for individual investors, I was thrilled to have the opportunity to sup- port his efforts to make some of these ETFs more accessible. I have spent the past decade working at the American Stock Exchange in the ETF division, assisting large traditional issuers and entrepreneurial start-ups in bringing new and innovative products to the marketplace and educating the investment community about the ETF category. With the aggressive growth in the ETF industry, it has been an extremely exciting time, and I am fortunate to have been directly involved in the hundreds of ETFs that have listed on the American Stock Exchange (AMEX) since my arrival.
My passion and enthusiasm for ETFs began during the relatively early stages of the ETF market, and like many others from the AMEX • xv • Trắc nghiệm kiến thức chứng khoán Mỹ tại : www.net Copyright © 2008 by Max Isaacman.