May 29, 2014
Recent Contributions to Pensions & Investments

5/26/2014 ETF returns more than just indexes, expense ratios 

5/12/2014 Potholes litter road to ETF investment by DC plans 

3/31/2014 Endowment chief enjoys flexibility offered by ETFs 

2/17/2014 Skepticism needed when evaluating new strategies 

1/20/2014 Subadvisory deals open ETF doors for many firms 

12/23/2013 Use of ETPs by institutional investors still elusive 

11/25/2013 Hedged ETPs looking to move beyond currency niche 

10/28/2013 Distribution, education take on renewed importance for ETF managers 

9/30/2013 ETF flows could offer clues about investor sentiment 

8/19/2013 ETPs attractive as overlay for equity portfolios, liquidity 

7/22/2013 Volatile markets put spotlight on mechanics of ETFs 

6/24/2013 International bond ETFs could bear some scrutiny 

5/27/2013 ETFs being used to get foot into institutional doors  

4/29/2013 Exchanges creating programs to attract ETP investors and market makers  

3/18/2013 Institutions’ resistance to active ETFs may ease 

2/18/2013 Hot market, ETF popularity hurting securities lending 

1/21/2013 ETFs open doors to other institutional accounts 

12/24/2012 Fees, indexes take center stage in ETF competition 

10/29/2012 More pension funds see value investing in fixed-income ETFs  

May 27, 2014
Recent Contributions to The Wall Street Journal

6/2/2014 Index ETFs May Not Track Benchmark As Expected

5/6/2014 Do Investors Need an ETF Strategist? 

3/3/2014 Active Stock ETFs are Poised to Take Off

2/4/2014 How Investors Can Play Europe in 2014

1/5/2014 Key Trends in a Milestone Year for ETFs

11/3/2013 Some Indexers Grouse about Smart-Beta Approaches

11/3/2013 Schwab Makes Case for Its Long-Awaited ETF 401(k)

11/3/2013 Converting from ‘Hedge’ to ‘Mutual’ Fund

9/4/2013 Have ‘Alternative’ Investments Lost Their Diversification Value?

8/4/2013 An Extra Data Point on ETF Values May Not Be Helpful

7/7/2013 Short Looks Beautiful to Bond Investors

5/5/2013 Companies Add to Lineups of ‘Free’ ETFs

3/3/2013 Qwafafew: Quants and Quaffs

2/3/2013 Firms Try Varied Designs to Add ETFs

1/3/2013 The Myth About ETF Managers Not Trading

1/3/2013 ETF Management: Behind the Scenes

10/23/2012 The Outlook for ETFs

9/5/2012 The Largest and Smallest ETFs

8/6/2012 PIMCO’s Bold Move into ETFs

7/9/2012 Index Funds and Tracking Error

5/7/2012 An Expert Talks About ETFs

1/9/2012 When It Comes to Tax Efficiency, Not All ETFs are Equal

May 14, 2014
Pay for performance? Hardly, at BBC.com. 
This column was a response to frequent discussions about the value-add of alternative investments, particularly hedge funds, relative to low-cost indexing. In general, I think investors are headed to a barbell model with cheap, low-cost beta on one side and expensive, high-conviction alpha-seeking (or uncorrelated) management on the other. A mushy middle of stock pickers will continue to exist, as well as institutions and individuals who have particular business reasons to be overweight a particular security.
At a recent event for financial advisers in New York, Mark Wiedman, who manages the global iShares business for BlackRock described the future of funds as an hour glass. (So let’s call that a barbell rotated 90 degrees!)
As an executive at the world’s largest index shop (and one that has struggled with traditional actively managed mutual funds but excelled at allocation models), he has seen this development first hand. And it likely only gets more polarizing from here. 
One of the hardest things, I think, for the hedge fund and alternative asset management community to do, in general, is communicate their value-add. Those who play outside of public market liquidity (PE/VC) should deliver non-public market returns to their investors. Those specifically targeting market neutral strategies should hone in on their value-add relative to cash and the risk-free rate.
A challenge for writers in articles like the one featured here is that a portfolio view (and risk/return discussion) can significantly weigh down the article and confuse the reader, so the default is to price and performance. It’s not elegant, but it’s a start. 

Pay for performance? Hardly, at BBC.com

This column was a response to frequent discussions about the value-add of alternative investments, particularly hedge funds, relative to low-cost indexing. In general, I think investors are headed to a barbell model with cheap, low-cost beta on one side and expensive, high-conviction alpha-seeking (or uncorrelated) management on the other. A mushy middle of stock pickers will continue to exist, as well as institutions and individuals who have particular business reasons to be overweight a particular security.

At a recent event for financial advisers in New York, Mark Wiedman, who manages the global iShares business for BlackRock described the future of funds as an hour glass. (So let’s call that a barbell rotated 90 degrees!)

As an executive at the world’s largest index shop (and one that has struggled with traditional actively managed mutual funds but excelled at allocation models), he has seen this development first hand. And it likely only gets more polarizing from here. 

One of the hardest things, I think, for the hedge fund and alternative asset management community to do, in general, is communicate their value-add. Those who play outside of public market liquidity (PE/VC) should deliver non-public market returns to their investors. Those specifically targeting market neutral strategies should hone in on their value-add relative to cash and the risk-free rate.

A challenge for writers in articles like the one featured here is that a portfolio view (and risk/return discussion) can significantly weigh down the article and confuse the reader, so the default is to price and performance. It’s not elegant, but it’s a start. 

April 22, 2013

My appearance in February on The ETF Store Show—a radio program produced by the ETF Store in Kansas City, Mo., on ESPN 1510, fulfilling my dream of following Mike & Mike on air. 

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April 20, 2013
Prior Art

For those (few) of you who follow my blog, it’s been quite a while since I’ve caught up on articles published elsewhere. So, this first post will just include links to some recent stories from Pensions & Investments and The Wall Street Journal

Hot market, ETF popularity hurting securities lending (sub) - This article took a look at the somewhat controversial area of securities lending, including pension funds that moved into ETFs for the additional income from lending. As ETFs increased in both assets and liquidity, demand to borrow dropped and had some funds reconsidering. ETFs also lend their underlying securities, a topic I covered in 2011.

Institutions’ resistance to active ETFs may ease (sub) - During the 20th anniversary celebration for SPY, many people began to ask the next question…when will active ETFs take hold? To truly catch on, it will take institutional-level faith in the product and, perhaps, a less transparent vehicle. Money-market mutual fund reform, however, could turn institutions and corporations to ultra-short active ETFs (which I during the 2012 hearings). 

Firms Try Varied Designs to Add ETFs - As asset managers look for more cost-efficient ways to offer their strategies across platforms, they have honed in on a few alternatives to launching entirely separate investment companies.

Qwafafew: Quants and Quaffs - On the lighter side, I worked with Rachel Louise Ensign on this amusing story about a group of quantitative analysts and their regular gatherings in New York and around the U.S.

5:39pm  |   URL: http://tmblr.co/ZaxaYyj90w9u
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