The missed the most important bit:
"I (the financial advisor) get a commission if I sell you a managed fund; I get nothing if you buy an ETF".
The missed the most important bit:
"I (the financial advisor) get a commission if I sell you a managed fund; I get nothing if you buy an ETF".
If you're paying a financial adviser a commission when you buy ETFs then I think that you are probably beyond help. This town is full of financial advisers - they are the bane of an expat's life here - and of the many whom I have fought off over the last decade I can safely say that not one was anything but a complete shyster.
Last edited by PDLM; 24-08-2010 at 03:59 PM.
agreed mr. know it all. who is debating that? 1% annual commission on a portfolio is STANDARD in the industry. you didnt know that mr. know it all? i think its a rip off but many MANY people do it and are ok with it....
also...picking ETFs is no difference than an advisor picking stocks! DUH! so, a person who gets an advisor to pick stocks for them is 'beyond help" cause they have no time?
infact incredibly RICH people do it cause they have no time.....so, it all depends on where you are.
ok..so really rich people who have no time, hire advisors are not as smart as you?
I think that comparing ETFs to Auction Rate Securities is a little far fetched.
ARS were effectively trying to turn water into wine by taking long dated debt obligations and selling them to short term money market investors. The securities were not listed and the rates were set by auctions done by brokers themselves. In addition the brokers themselves often supported the prices. When the market collapsed the brokers ran to the hills, leaving money market investors in the proverbial brown stuff. Since the collapse there have been attempts to bring in more transparency but the words "stable door" and "horse bolted" spring to mind.
ETFs are traded on an exchange, and get ordered through a broker. Yes there is liquidity risk, as there is in theory with an Open Ended fund tries to dispose of its underlying positions when someone sells, I think most people would feel far safer with the liquidity risk of ETFs versus ARS.
Even the lowly Thai ishares index fund (offered to US investors) had volumes in August of c. 1/4 million units on the NYSE (a Brazil one was about 16mil yesterday). If you really were going to play around with millions of US$ what are you doing here, given your comment here
http://www.geoexpat.com/forum/155/th...ml#post1085621. THD should be within the rules given to you.
NYSE, New York Stock Exchange > Listings > Listings Directory
NYSE, New York Stock Exchange > Listings > Listings Directory
What you will find is that buying US tax compatible mutual funds in Hong Kong is extremely difficult with very high minimum account levels if you find one and is if offered likely to be on an execution only basis (no advice). ETFs on the other hand you can get more easily through an eTrade account or similar.
Last edited by fth; 24-08-2010 at 04:40 PM.
ETFs are actually a type of index fund that can be traded intra-day (just like a stock). Typical index funds cannot be traded intra-day. Both track an index and except in a few odd cases, neither are actively managed. There are more ETF choices, and fees are slightly higher. You are probably safe going with an iShares or x-Trackers ETF. Go to their sites. (The HK banks tend to push structured products and actively managed mutual funds because they collect higher fees. HSBC does have a few ETF offerings.)
fth, your comments are much appreciated. I am trying to create a lazy portfolio strategy with about $750k US dollars...hence looking for index mutual funds in the mix...but it seems difficult to get them in HK....i really do not have time to manage or look at it. i just want to let it ride over the next 10-20 years....if i can get 8-10% average return...over that time frame, i'll be very happy....slow and steady is my game....i have to worry more with ETFs per advice from a friend of mine...
Advisors in Hong Kong typically go down the commission only route, and hence why they like to sell stuff like Investment Linked Assurance Schemes and high front end fee investment schemes. We are not in the US and don't expect the majority of investment advisors to behave as they do stateside.
Just looked at my E-Trade account which I opened here in HK. Yes you can get your mits on about 7,500 various mutual funds including about 30 from Vanguard which are index funds.