Products
Guest Commentary by Rick Bookstaber
The Gold Bubble
I am not going to spend time here talking about how the price of gold is off-the-wall, that it is not just a bubble in the making, but a bubble waiting to burst. I don’t want to waste your time on that point.We all know it is a bubble.... more
Series on ETFs (2): How Risky Are They Really?
ETFs and the Risk of Default
This article addresses the default risk of ETFs. The simple answer is short: in general, there is no risk of default for ETFs. A fund sponsor is usually required to keep fund assets (e.g., stocks) separately from the fund sponsor’s own assets. There is, however, another riskier type of ETF called a swap-based ETF... more
Series on ETFs (1): How Risky Are They Really?
ETFs and the Tracking Error Risk
Given the present "ETF-hype", some investors fear that ETFs might carry their own “dirty little secrets” to make them more profitable for the issuer but also riskier for the fund client. In order to answer these questions we will publish a series of articles to take an in depth look at the major risks of ETFs... more
Products: Socially Responsible Funds
Doing Good and Doing Well?
In Copenhagen politicians are gathering on a mammoth conference to discuss climate change and its implications for humanity. This is only one sign that the environment and the responsible use of resources have become a major global topic. But it is not only politicians who think about responsibility. Wealthy investors have been pouring money into socially responsible investments (SRI) in unprecedented amounts.... more
Products: The Real Costs of Mutual Funds
Total Expense Ratio – A Misnomer
In our recent analysis of mutual funds of the largest wealth managers and private banks we have specifically looked at the Total Expense Ratio (TER). This ratio is the closest measure to evaluate the costs of a fund. But as our research shows the TER is by no means a sufficient number to assess the real total costs of a fund. ... more
Products: Fixed Income Index Investing
Watch Out for the Tracking Error of Bond ETFs
The Wall Street Journal reports that pricing is becoming an increasing problem for bond ETFs. A bond ETF is an exchange traded passive index fund that tracks an index of bonds. This can be an index consisting of treasuries, government bonds or corporate bonds. There are mainly two problems that can potentially compound to the distortion of the pricing of the bond ETF... more
Products: Commodity Investments
Gold Hits $1000 but Long-Term Perspective for Commodities Doubtful
Today the gold price has surpassed the “magic line” of USD 1000 per ounce. Other commodities like oil or certain metals have also come back a long way from their lows at the end of 2008. It seems that with some silver lining on the horizon of the economy, commodity investors have become especially bullish again.... more
Collectibles: Wine as an Investment
Valuable Tips for Choosing the Right Wine
It is definitely possible to make money through investing in top wines; however, it is certainly not as easy as is often suggested. If you decide to invest in wine, which wines should you focus on? ... more
High Net Worth: Tips for Budget Conscious Wealthy
Airfares and Hotel Prices Down for Holidays
The economic crisis has reduced the assets of many of the formerly rich considerably. We hear that some have even to give up on their NetJets and need to learn how to stay in a much tighter travel budget. But here comes the silver lining on the horizon... more
Products: How to Create an ETF Portfolio
Keep It Simple (Part 2)
In part 1 of our series we talked about the right index to chose when investing in ETFs. The question now would be which are the right product and the right fund provider. ... more
Products: How to Build an ETF-Portfolio
Keep It Simple (Part 1)
This Website has been actively supporting the use of index products like ETFs to build an investment portfolio. The advantages are very clear: on average index funds are significantly better performers than managed products and the costs are much lower.... more
High Net Worth: Crisis Hits Private Jets Business
NetJets Europe Cuts Nearly A Third of its Flight Crew
NetJets Europe announced that it is to reduce its workforce by the equivalent of 300 full-time pilots as a response to the hard hit the economic crisis took on the corporate and private jet travel market. According to the industry journal Flightglobal, NetJets Europe has 60,000 excess duty days that they need to reduce. The company already cut its planned business jets delivery by 60% for 2009.... more
Collectibles: On What the Wealthy Spent Their Money in 2008
Luxury Collectibles Remain the Number One Passion Investment
The year 2008 took its toll on the amount High Net Worth Individuals (HNWI) spent on collectibles, with huge declines in sales of private jets, yachts, luxury cars as well art and jewellery, gems and watches. ... more
Products: How Risky Are Your Financial Products?
Value at Risk – How One Formula Paved the Way to Hell
It was in August 2008 that Malcolm Casey*, a resident of Highland Park (New Jersey, US), was getting a little worried. For months and months his portfolio, consisting mostly of “defensive” structured products, has been generating losses and being just a few years away from retirement, he felt that his life savings were in danger. ... more
Exclusive Interview: Hedge Fund Expert Richard Bookstaber
"Don't Trust The Numbers Coming Out Of Any Hedge Fund"
Richard Bookstaber, renown risk management and hedge fund expert, is the author of the book “A Demon of Our Own Design”. In the following exclusive interview with MyPrivateBanking.com Richard explains his views about risk and hedge funds with a special emphasis on the private investor.... more
Collectibles: The Wine Investment Column
Why You Should Not Buy En Primeur
En primeur is a method of purchasing wines early, even before they are bottled and are still in their oak barrels. In this system, practiced for example within Bordeaux but also in Burgundy and in other premium wine regions...... more
Products: A Simple Way to Gain Currency Exposure
Are Currency ETFs Any Good For Your Portfolio?
Currency ETFs these days are quite the rage. It is a relatively new product category, first started in 2006. Recently various currency ETF providers have further expanded their product range. So, are these products useful for affluent private investors?... more
Collectibles: New Auction World Record for Cars
1957 Ferrari sold for € 9 million
A pontoon-fender 1957 Ferrari 250 Testa Rossa (TR) was sold for €9,020,000 in Maranello, Italy to set a new auction world record as the most expensive motorcar ever to be sold at an auction. ... more
Charity: Charity Under Fire
Accusations Against The Bill Gates Foundation
A recent research study criticises the Bill and Melinda Gates’ foundation on the way the spending on health are distributed. The study, published in the medical journal Lancet, questions the accountability and impact of the granting of funds by the Bill and Melinda Gates Foundation. In 2007 the amount spent by the Gates foundation, USD 1.22 billion, almost equalled the funds spent by the WHO. ... more
Products: ETFs Further Spreading
Greater China Index for ETFs announced
Investors who want to participate in the economic growth of Greater China (PR China, Taiwan, Hong-Kong) could so far only choose between the rather expensive funds or try their luck as a stock picker. As a new sign that the spreading of ETFs (Exchange Traded Funds) is accelerating, the stock exchanges in Taiwan, Hong-Kong, Shenzhen and Shanghai ... more
High Net Worth: Wealth Management of the Rich and Famous
Why Some Celebrities Lose Their Fortunes Easily
Kim Basinger, Burt Reynolds, Mike Tyson and Meat Loaf all have one thing in common: They earned a fortune during their career and still at one point had to file for bankruptcy. This anecdotic evidence is backed by statistics from various professional sports leagues.... more
Charity: UK Giving List
Donations of Very Rich Increase Despite Fall in Wealth
The Sunday Times Giving List revealed that despite a 37.5% fall in the combined fortune of Britain's top 1000 wealthiest people this year, the top 100 philanthropists have put £216m (€242m) more into charity than during the previous 12 months.... more
Products: Check your Portfolio
Managed Products – the Hidden Cost Traps
No matter what pricing model you choose, they have all one thing in common: You only see the direct costs such as transactions costs, flat- or performance-fees. What you do not see, but pay as well, are the hidden fees and costs for the various investment products in your portfolio. ... more