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Analysis by Francis Groves, MyPrivateBanking's ETF-Specialist

Are ETFs Becoming a Danger to the Financial System?

ETFs are becoming increasingly popular with private investors, at the same time ETF structures are growing more complex. Could ETF popularity in combination with complexity nurture hidden risks to the financial... more

Comment by Francis Groves, MyPrivateBanking ETF-Specialist

Financial Stability Board Must Provide More Details on ETF-Risks

The Swiss-based FSB (Financial Stability Board) has released a report on potential financial stability issues arising from recent trends in ETFs. But this report does not provide the necessary depth and details to be useful. ... more

Series on ETFs (4): How Risky Are They Really?

The Risks of Exotic ETFs – Don’t Be Too Adventurous…

The following analysis addresses the risk of investing in exotic ETFs or, in other words, the danger that an investor invests in an unfamiliar underlying index of assets without appreciating or quantifying the risks. And the scope for branching out into exotic ETFs is increasing... more

Series on ETFs (3): How Risky Are They Really?

ETFs and the Trading Risk

The following analysis addresses the trading risk of ETFs or, in other words, the risk that an investor has to deal with too large a spread. You buy ETF shares at the “ask” and sell them at the “bid”, so the bigger the "spread," the more money you lose on each trade.... more

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

The Total Expense Ratio (TER) 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... 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 clear... 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

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... more