David Trainer, president of local investment ratings firm New Constructs and miner of financial fine print, says ETF investors would be well served in the coming months by putting their money in vehicles that track the consumer staples sector. That part of the market, Trainer says, contains the fewest stocks he considers to be risky and plenty of names that produce a lot of cash for investors.
A labor union's local pension fund is teaming up with a peer out of Cincinnati to take on investing titan BlackRock, which they say has structured its iShares family of exchange-traded funds with excessive fees. At the heart of their lawsuit is the amount of money BlackRock executives have taken from the funds' securities lending revenues. But BlackRock says it will defend itself.
The company's securities-lending program has delivered above-average returns to its ETF shareholders over time, BlackRock spokeswoman Caroline Hancock said in an email. "To achieve this, we run the program ourselves while bearing all the costs, rather than outsourcing to third parties as others do," she added.
Local investment researcher David Trainer at New Constructs says technology stocks are primed for decent gains in the remainder of 2011. But he doesn't see many options for getting into the game via ETFs.
Note: New Constructs is backed by Solidus, which also has invested in Nashville Post parent SouthComm.
"We cater to short-term investors," says Paul Brigandi, senior portfolio manager at Direxion. The funds are for "sophisticated investors who have time to monitor and manage the portfolio on a daily basis." Kathman also warns that leverage can magnifies losses in a way that can be "pretty dangerous" for most investors. It's "not something most people should be fooling around with," he says.