Blog

Our experts frequently write blog posts about the findings of the research we are conducting.

Displaying 371-380 out of 435 results for "Mutual Fund".

Credit Risk in the Municipal Bond Marketplace

(Feb 2012)

Municipal bonds are debt securities issued by city, county or special-purpose government units (known as municipal authorities). This debt is typically issued to fund public works projects such as health care, construction projects or education. Because the interest from municipal bonds is usually exempt from federal income tax (one notable exception is Build America Bonds); the municipal bonds are especially attractive to high tax-bracket individuals. We will discuss some specifics of the...

What is a Synthetic ETF?

(Feb 2012)

The total asset value in Exchange-traded funds (ETFs) has increased dramatically in recent years. At the same time, ETFs have become more commonly associated with exotic features. One such ETF (a synthetic ETF), also known as a swap-based ETF, tracks the return of a selected index (e.g. the S&P 500 stock index) using a total return swap. The use of derivatives such as total return swaps distinguishes a synthetic ETF from the physical ETFs on the market. A complete list of synthetic ETFs...

Stock Market Correlation and Portfolio Diversification

(Feb 2012)

It has long been argued that diversification of stock portfolios across country borders is important to reduce investment risk. Although the 2007-2008 financial crisis wreaked havoc on both the developed and the developing world, diversification remains a central pillar of modern portfolio theory. The following figure from World Federation of Exchanges shows the value of several stock indexes starting from 1992(Full Disclosure: No data available for Tehran SE/TEPIX in 2008, 2009 and 2010)....

Did ARS Interest Payments Adequately Compensate Investors After the Failures?

(Feb 2012)

Auction Rate Securities (ARS) are floating interest rate debt issued primarily by municipalities, mutual funds, and special purpose trusts. ARS were marketed as short-term, cash-equivalent investments similar to commercial paper but any similarities with short-term investments were superficial and misleading. ARS are long-term debt traded in periodic auctions with prices fixed at par. The auction-determined interest rate was constrained by a maximum rate which could prevent the auctions from...

SEC Litigation Releases: Week in Review - February 17th, 2012

(Feb 2012)

Court Enters Default Judgement Against SEC Defendant Daniel J. Burns and Orders Him to Pay over $1.1 Million
February 16, 2012, (Litigation Release No. 22260)
In their January 2011 complaint, the SEC filed a civil injunctive action against Daniel J. Burns and Robert F. McCullough, Jr. alleging that both defendants were guilty of insider reporting violations. In addition, Burns allegedly "received hundreds of thousands of dollars in improper compensation and benefits from CytoCore[, Inc.] as an...

Should You Cash Out Your Home Equity to Find Your Missed Fortune? Careful! A Scam Might Be On the Way

(Feb 2012)

As a result of a lifetime of thrift, many homeowners find themselves in their 50s and 60s with considerable equity in their homes. Some investment advisors and insurance salesmen have been recommending that these homeowners refinance their mortgages to take the equity out of their homes - sometime called "equity harvesting" - to purchase high cost insurance contracts or investments. Whether insurance contracts or high cost investments are being pitched, the advisors and brokers get a big pay...

Home Equity: Changing Perspectives

(Feb 2012)

We wanted to write a quick post highlight the changing perspectives of industry experts concerning something as mundane as home equity. The LA Times reported in August 2005 that, due to the rapid appreciation of real estate values and perceived wealth accumulation, consumers were beginning to spend more freely. In fact, at the time it was becoming commonplace (and even suggested by experts) to cash out equity in your home to finance otherwise unobtainable, and sometimes transient, purchases...

SEC Litigation Releases: Week in Review - February 10th, 2012

(Feb 2012)

This is the first post in what will become a weekly tradition on the SLCG blog.

SEC Charges Kenneth A. Dachman for Orchestrating a Misappropriation Scheme and Offering Fraud
February 6, 2012 (Litigation Release No. 22254)
The SEC filed a complaint in the U.S. District Court for the Northern District of Illinois alleging that Kenneth A. Dachman had misappropriated nearly $2 million of investors funds by making false and misleading statements concerning the offerings of three companies for which...

Could Credit Rating Agencies be Held Accountable This Time?

(Feb 2012)

A recent wall street journal article reports that U.S. lawmakers plan to introduce a bill that would require top credit-rating firms to review their credit ratings on a quarterly basis, hoping that more frequent reviews would increase the accuracy of their ratings and help identify potential problems.

According to Wall Street Journal, the bill would "amend the Securities Exchange Act of 1934 to require the chief executive officer of each [credit-rating firm] to attest, quarterly, to the...

ETFs' Asset Value is Increasing, Trading Volume Remains Stable

(Feb 2012)

Financial Times reports that the daily trading volume in the 50 most traded US ETFs in this January and last December was at its historical lows, dropping to the level of the end of 2007. This is surprising since over the past decade the total asset value of ETFs have increased from its 2002 level of $102 billion to just over $1 trillion in 2011 according to the Investment Company Institute. Below we plot the ETF total asset value over the last decade.

Intuitively, one would expect as asset...

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