Friday, June 5, 2009

Short Takes: Securities Lending, Financial Literacy, and Management Fees

1. Larry MacDonald shows how mutual funds and ETFs make extra money lending out shares belonging to investors. Unfortunately, it is investors who lose if the organization borrowing the shares is unable to return them and the collateral suffers losses due to being poorly invested.

2. Jonathan Chevreau reports on a push to boost financial literacy for youth (the web page with this article has disappeared since the time of writing). Amusingly, the financial literacy forum is being hosted by the Investment Funds Institute of Canada (IFIC). If Canada’s youth were to learn what they need to know about money and investing, the Canadian investment industry as it currently exists would be all but wiped out.

3. Canadian Financial DIY tries to get to the bottom of what Claymore means by “MER” and “management fees”.

4. Canadian Capitalist shows that if you buy a foreign stock through a US ADR, your currency exposure is to the foreign currency and not US dollars.

5. Patrick makes a case against waiting until the market “calms down”.

6. Preet continues to look at strategies for simultaneously shorting both the bull and bear versions of leveraged ETFs. My suspicion is that over the long run the gains won’t exceed the interest on borrowed shares by enough to make this strategy sufficiently profitable, but I’ll reserve judgement until Preet is done fine-tuning this strategy.

7. Big Cajun Man saves money by buying meat at 50% off, but seems conflicted about whether he believes it is truly safe.

2 comments:

  1. So far no strange diseases, so I guess 1/2 off meat is ok, have a great weekend!

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  2. It is nice to see Vanguard once again among the "good guys" and putting the profits of the lending business in investor's hands where it really belongs.

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