Dislocations

RYAN By Guest Blogger Ryan Lewenza

A few weeks ago I was speaking at an ETF conference in Montreal where Matt Hougan, chairman of Inside ETFs, predicted that Canadian mutual funds would never outsell ETFs again. Last year Canadian ETFs had net sales of $19.8 billion while mutual funds saw negative sales of $2.7 billion, representing the first time in a decade that ETFs outsold mutual funds. Matt’s prediction received some pretty good media attention to say the least, I’m sure to the chagrin of many of the mutual fund companies and banks that sell mutual funds.

While I’m not so bold as to say that ETFs will outsell mutual funds every year going forward, I definitely agree with Matt that ETFs are the future and that more and more investors will dump their high-cost, ineffective mutual funds for low-cost ETFs. But, as this trend plays out, some worry that it will lead to market dislocations, such as increased market volatility and a decrease in price discovery. Price discovery refers to the process of determining the price of an asset through the interactions of buyers and sellers.

Some believe that as money flows into ETFs and passive investments, like an S&P 500 index ETF, that fund flows are driving stock prices and the equity markets versus investors buying stocks based on their underlying fundamentals. They contend that ETF purchases are pushing up stock prices and valuations of the largest stocks (e.g., the FANG stocks) while undervaluing smaller and out-of-favour stocks. This week I attempt to debunk these concerns.

The first point to make is that I believe some are overplaying and overestimating the size and impact of ETFs on the capital markets. While ETFs are experiencing large investor flows they still represent a fraction of the overall capital markets. According to Blackrock, U.S. stock ETFs accounted for just 8.5% of the total market, meaning over 90% of the U.S. equity market is made up of individual stocks, mutual funds and non-ETF investments. For the bond markets ETFs make up an even smaller percentage at 1.4% of the total U.S. bond market. ETFs still only represent a small fraction of the capital markets so those ETF critics talking about how much ETFs are impacting the markets are just spinning a narrative rather than reflecting what’s actually going on.

ETFs Represent a Small Fraction of the Total Market

Source: SIFMA, Bloomberg, BlackRock

Another interesting way to hit home this point (that ETFs are not having a demonstrative impact on the markets) is to compare the amount of ETFs traded versus their absolute flow. To understand this you first need to understand how an ETF actually works.

ETF shares are created by a process called creation and redemption. More specifically, the ETF company creates a new ETF by working with an “Authorized Participant”, which can be a market maker or large investment firm. The AP buys and delivers the underlying securities to the ETF company. For example, say Blackrock wants to create a new ETF that tracks the S&P 500, the AP will buy shares of the 500 companies in the S&P 500 based on their weights within the index. In exchange, Blackrock provides units or shares of equal value to the AP, usually in blocks of 50,000. So now we have 50,000 shares or units of this S&P 500 ETF.

Now when it starts trading in the market, buyers and sellers are simply trading back and forth these 50,000 shares of the S&P 500 ETF. No new units are being created or redeemed, so no new money is flowing into the S&P 500 companies. Occasionally new money will come into the ETF, which will require the creation of new additional units, but generally speaking, after the ETF has been created buyers and sellers are just exchanging the ETF shares.
Why does this matter?

The creation of new ETF shares represents an even smaller percentage of overall trading activity. Look at the chart below. It calculates the percentage of US equity ETFs traded as a percentage of all US stocks traded and that equates to about 25%. However, when you look at the absolute flow of equity ETFs traded (the amount created in new units) it represents just 1.8% of all trading volume. Essentially, after the ETF units have been created any buys and sells of the ETF are not impacting the actual stocks in the index, hence why these concerns over ETFs are overstated.

Creation of ETFs Represent Just 1.8% of Absolute Trading Volume

Source: NBF, Bloomberg

On the volatility concern that ETFs are leading to higher market volatility, this also is just a myth with little supporting evidence. Below is an interesting chart that overlays the volatility (standard deviation) of the Russell 3000 (a broad US equity index that includes large and small US stocks) with the rising trend of US equity index fund assets as a percentage of all equity funds and you can see there is little relationship of market volatility and rising ETF assets. The volatility is random with noticeable spikes during the tech bubble and financial crisis.

Passive Asset Percentage and Market Volatility

Source: Vanguard

Finally, one criticism of ETFs from active portfolio managers and mutual fund companies is that money flowing into an ETF is driving up stock prices of the largest companies with no regard to valuations and fundamentals of the underlying companies. As I already covered, trading volume of ETFs does not necessarily result in new units being created and money flowing into those underlying stocks. And more importantly, this view presupposes that active portfolio managers have the ability to sniff out undervalued stocks and outperform the market. This is BS. We all know the statistics. Over the last 10 years only 14% of actively managed equity funds outperformed the S&P 500 and only 11% of Canadian equity mutual funds outperformed the TSX.

So their argument that active managers help to keep the market in-check by allocating funds to “undervalued” stocks is without merit. In my opinion, active portfolio managers’ contempt for ETFs has more to do with their declining mutual fund assets and compensation than their actual concerns with market efficiency and stability.

ETFs are the future and offer many advantages to traditional mutual funds. So the next time you see a headline like the one below just disregard and revisit this blog post!

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

84 comments ↓

#1 Ronaldo on 07.06.19 at 4:33 pm

I will stick with my 6 funds with an mer of .88, 60/40 b & d portfolio which is up 11.2% ytd net of fees. Not all funds are created equal. I seldom have to rebalance as that is the fund managers job. I held only one etf and that was HEP which i sold recently for a nice cap gain.

#2 Danthemechanic on 07.06.19 at 4:52 pm

What are your views on robo-advisors then? They seem to provide pretty good value for those that don’t want to manage their own portfolios. In my case it’s a hedge against my own bias and “over trading” my own account. Curious to hear a professionals opinion on the myriad of robo-advisors!

Thanks!
Dan

#3 akashic record on 07.06.19 at 4:58 pm

#139 Pfft on 07.06.19 at 1:31 pm

hilarious how few folks on here know the difference between communism and socialism.

Hilarious how the huge gap between the two has narrowed down in the past few decades.

#4 Grateful Boomer on 07.06.19 at 4:59 pm

Great post Ryan, Thank-you for explaining additional merits of etf vs mutual funds in additional to all the other advantages Garth has explained to us. Do you think a 60/40 balanced mutual fund has any merit for retirees seeking ROC that lowers their annual tax and defers it for close to 20yrs?. If take 6% withdrawal on 100k, and it makes 6% after 20 yrs still have 100k and ACB of zero so then pay capital gains tax, the most effective tax payment as again Garth explained in previous posts…of course this less a mer of maybe 1% with a fund like Mawer…..not .1 or .2 like many ETFs but the tax savings seem like outweigh the additional mutual fund fees?

#5 akashic record on 07.06.19 at 5:21 pm

Thanks Ryan, it was interesting.

“ETF company creates a new ETF by working with an “Authorized Participant”, which can be a market maker or large investment firm. The AP buys and delivers the underlying securities to the ETF company.”

Is it a securities regulation requirement for the AP to exist – considering, that according to the market share stats the actual capital required to buy the initial stocks may not be out of reach for a company like Blackrock and most of the future ETF trades are virtual, does not involve purchasing more actual company shares?

This also explains why trading ETFs are so cheap compared to trading shares.

#6 Frank on 07.06.19 at 5:34 pm

Ronaldo. What are those 6 funds. Thanks

#7 crowdedelevatorfartz on 07.06.19 at 5:37 pm

Excellent topic and tutorial.

I remember several years ago asking my former financial ” advisor” who have my money parked in expensive, illiquid Mutual Funds, if ETF’s were the way of the future because of their low fees and ease of trading.
He choked on his coffee….
And sarcastically replied,
” Well, if that’s what you want to do with your money. Invest in crappy ETF’s……. I wouldnt recommend it…”

I moved my entire portfolio 3 months later.

#8 crowdedelevatorfartz on 07.06.19 at 5:47 pm

@#149 please go

Well …. 50 YEARS OF MAPLE LEAF INCOMPETENCE
could change his name to:

50 YEARS OF CANUCKS INCOMPETENCE

and no one could accuse him of lying…….
We dont mind if he slags the Lower Brainland either.
Sometimes the truth hurts……

#9 Ryan Lewenza on 07.06.19 at 5:54 pm

Danthemechanic “What are your views on robo-advisors then? They seem to provide pretty good value for those that don’t want to manage their own portfolios. In my case it’s a hedge against my own bias and “over trading” my own account. Curious to hear a professionals opinion on the myriad of robo-advisors!”

I think they are great for just starting out investors or smaller accounts. But as your portfolio and net worth grows I believe a high-quality, low fee advisor is more critical as your needs become more complex and you want to talk to experienced individuals versus a computer algorithm. – Ryan L

#10 Ryan Lewenza on 07.06.19 at 5:58 pm

akashic record “Is it a securities regulation requirement for the AP to exist – considering, that according to the market share stats the actual capital required to buy the initial stocks may not be out of reach for a company like Blackrock and most of the future ETF trades are virtual, does not involve purchasing more actual company shares?”

Yes I believe so. You need a middle person to be in-between the ETF company and buyer/seller to make sure it all runs smoothly and in the buyers/sellers best interest. They help make the market more efficient. – Ryan L

#11 crowdedelevatorfartz on 07.06.19 at 6:05 pm

@#151 Leanne
Capitalism bad.
Socialism good.
I used to be a naive as you.
Then I hit puberty.

https://en.wikipedia.org/wiki/List_of_countries_by_suicide_rate

Interestingly the suicide rates in Nordic countries seem to be much higher or equal to Canada.
Former communist country Russia is near the top.
China isnt too pretty either.

Capitalism may not be the answer but at least what you earn is yours….as opposed to Venezuela where….what you earn is theirs comrade.

#12 Ryan Lewenza on 07.06.19 at 6:08 pm

Grateful Boomer “Do you think a 60/40 balanced mutual fund has any merit for retirees seeking ROC that lowers their annual tax and defers it for close to 20yrs?.”

This is one advantage of mutual funds, but it comes with a price – higher MER. So you get the advantage of ROC but at a higher expense. When we weigh all the pros and cons we still come out on the side of ETFs. – Ryan L

#13 BobC on 07.06.19 at 6:14 pm

Ryan, since I’m a citizen and live in the “home of free” I’m not allowed to use the services of your firm. I am prepared to invest for each of my 15 grandkids. There’s a Canadian company that has expanded into the U.S. called wealth simple that supposedly does what you guys do with ETF’s.
Have you (or any readers) had any experience with them? Should I forget them? Any input would be appreciated.

#14 Randy on 07.06.19 at 6:29 pm

I’m saving up all my money because food prices are going to skyrocket…..very soon… due to crop failures…They can’t print more food like they do with money….

#15 mnpr on 07.06.19 at 6:55 pm

Fantastic post. Answered some concerns I had. Thank-you Ryan.

#16 Sail Away on 07.06.19 at 7:17 pm

I just read the Globe and Mail Opinion section. Donald Trump’s name or title appears in print 61 times plus his face in a political cartoon. Mostly disparaging, some as descriptors, but definitely none favourable. Justin Trudeau appears in print 6 times. Mostly as a descriptor.

This feels like an unhinged press foaming at the mouth. They do realize that Canada is not the US, and that Canadian papers will not have the slightest influence on US politics, right? What’s the saying, “change the things that you can, accept the things you cannot” ?

If I wanted to read non-stop blather about another country’s leader, I’d generally look at that country’s press. It seems Canada’s press also feels their effort is better spent covering the US, than, say, Canada.

#17 Linda on 07.06.19 at 7:25 pm

Right on, Ryan! Here is hoping more people eschew the high MER fees & expect actual equal market performance from the banks & actively managed funds.

#18 crowdedelevatorfartz on 07.06.19 at 7:34 pm

@#16 Sail away
” I’d generally look at that country’s press. It seems Canada’s press also feels their effort is better spent covering the US, than, say, Canada”
++++++

Trudeau being ignored in the final months leading to a close election result…..
Trump’s a safe target.
Canada’s Main Stream Media doesnt want to bite the hand that feeds it…….

#19 Flop... on 07.06.19 at 7:36 pm

“First the important stuff. I have to give a shout out to our Raptors, the 2019 NBA champions! Being a long-time fan and a proud Torontonian, I couldn’t be happier for our team who played their butts off and showed incredible grit, determination and team work. We can all learn something from that team and their season. Now let’s re-sign Kawhi and go back-to-back next year, when we’re all collectively chanting “let’s go Raptors!”

My old buddy Ry, you wrote this during your last at bat.

I think you might have jinxed it.

Mind you The Clippers did move Heaven and Earth to get Kawhi.

As an atheist, don’t know too much about the first part.

The Clippers definitely moved earth as we’ve had a string of earthquakes the past few days.

Smoking Man probably delirious buying up all the scuffed up liquor.

Then again he could still be in Toronto, just taking the occasional trip to Sin City.

Kawhi will be fine, he can probably afford to have a chopper on the roof ready to go…

M45BC

#20 baloney Sandwitch on 07.06.19 at 7:41 pm

I told my 25 year son to by Vanguard asset allocation etfs. You don’t even have rebalance – they balance themselves and have a rock bottom MER.

#21 BOOM! on 07.06.19 at 7:55 pm

Turner Investments mic drop! (Great post, Ryan)

#22 expat on 07.06.19 at 8:00 pm

ETF’s really have been a good evolution imho.

What I always remain cautious about is this.

It’s easy to buy them when things are great.
What the heck happens in a liquidation like Monday after Lehman.

Trust me when I say chaos runs supreme in those moments when I call my bank (largest bank in Canada) that day to cash a Money Market Fund and they say
“uhhhh yeah about that. I’ll get back to you.”

But other than that they are valuable assets to own just make sure you aren’t the last sucker in the room.

#23 Nonplused on 07.06.19 at 8:16 pm

ETF’s kind of rely on somebody with money making sure that stock prices are fairly valued. In other words individual investors and hedge funds. But so far as your graph shows ETF’s are not a disproportionate size in the market so all should be well. If ETF’s grew to large they could become a self-reinforcing feedback loop, but I don’t think they have done so at this point.

#24 Flop... on 07.06.19 at 8:24 pm

#21 BOOM! on 07.06.19 at 7:55 pm
Turner Investments mic drop! (Great post, Ryan)

//////////////////

Kindly get yourself another handle please.

That one hangs in the Blog Hall of Fame.

Retired, but not forgotten…

M45BC
M64WI

#25 Flop... on 07.06.19 at 8:24 pm

#21 BOOM! on 07.06.19 at 7:55 pm
Turner Investments mic drop! (Great post, Ryan)

//////////////////

Kindly get yourself another handle please.

That one hangs in the Blog Hall of Fame.

Retired, but not forgotten…

M45BC
M64WI

#26 Buford Wilson on 07.06.19 at 8:27 pm

Buyers and sellers are simply trading back and forth shares of the S&P 500 ETF.

Then how does it track the S&P 500? The value of the ETF can be independent of the underlying index depending on supply and demand of the ETF.

#27 -=jwk=- on 07.06.19 at 8:35 pm

We traded a decent top 30 player (derozan) and change for Kwahi and Danny Green. The Clippers gave up SIX first round draft picks, +3 young guns for to get a guy that would make Kwahi sign. We got the deal of the century or the Clippers have lost their collective minds..

#28 Francis on 07.06.19 at 8:44 pm

@Ronaldo
Bragging you got super awesome funds because you got an average return of an ETF 60/40 portfolio that last 6 mouth is very dump.

Everybody that was balance the last 6 month got these return and if not because of of the super duper portfolio manager of your 6 fund.

#29 Diversified in Oakville on 07.06.19 at 8:49 pm

#13 BobC
I have had a 7 figure portfolio with Wealthsimple for the last 4.5 years. Excellent results AND great human advice anytime. I am staying put.

#30 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 07.06.19 at 10:03 pm

I know there’s lots to berate Toronto about today, its horrific early summer violence spree, losing their TFW basketball players all of a sudden and more, but I have promised our host to be more positive about the 6 so I don’t get deleted again.

But it’s so hard.

So – any suggestions out there in the steerage section? Anything you can suggest about the GTA that is truly positive that I could riff on?

Thanks for your help! :)

#31 Ryan Lewenza on 07.06.19 at 10:34 pm

Buford Wilson “Then how does it track the S&P 500? The value of the ETF can be independent of the underlying index depending on supply and demand of the ETF.”

There is rebalancing of ETFs to match the daily weights of the underlying index. If not there’s large tracking error. But this is on the margin. My main point is that majority of trading volume for an ETF is related to buying and selling of the actual ETF and not of the underlying shares as many believe. – Ryan L

#32 Ryan Lewenza on 07.06.19 at 10:38 pm

Flop ““First the important stuff. I have to give a shout out to our Raptors, the 2019 NBA champions! Being a long-time fan and a proud Torontonian, I couldn’t be happier for our team who played their butts off and showed incredible grit, determination and team work. We can all learn something from that team and their season. Now let’s re-sign Kawhi and go back-to-back next year, when we’re all collectively chanting “let’s go Raptors!”

My old buddy Ry, you wrote this during your last at bat.

I think you might have jinxed it.”

Agreed. Not a great day for our Raptors and our city. But Kawhi brought us a championship which we can all be proud of. – Ryan L

#33 Stan Brooks on 07.06.19 at 11:06 pm

#30 50 YEARS OF MAPLE LEAF INCOMPETENCE! on

The positive news is that the economy is strong, it has been very strong for a long time, the job market is awesome but apparently 1.75 % interest rates is way too high for it so it should be cut:

https://ca.finance.yahoo.com/news/bank-of-canada-to-cut-rates-in-october-then-twice-more-economist-150049565.html

That is right, all is good, inflation is low, they are confident in the future economy improvement.

——————————————

What is the reality once we remove the verbal diarrhea constantly spewed by the statistics, BoC, some delusional politicians with certain ethical challenges and the paid for with our tax money media?

– economy based on consumption and ever increasing credit at rates far faster than a normal economy can endure.
Nobody is measuring what percentage of the fake growth is based on credit, in net real terms we are sinking quite fast, if you take out the credit.

– credit is post-stamps called currency, issued by lenders at will with no backing as deposits and represents no past labour or sale of assets. It is made up ‘money’ that has to be repaid back with interest that does not exist. Hence the paradox of ever increasing debt while savings decrease and are virtually non existent. How is that different from counterfeiting? You have to return it with interest that you have to earn, that is the nice part.

It is private money legalized by taxes.

In the process of lending lenders destroy purchasing power of savings that actually represent past labour or sale of assets.

– Inflation that is far higher than the constant blatant lies communicated by the statistics. 1-2 % (now even 2.4%!). Sure.

– the end game is people having to sell assets in order to keep up with inflation as wages are stagnant, go deeper in debt just to make ends meet, then in further debt just to pay the interest on previous debt… until they own nothing but debt to the banks, debt made from nothing but a nice oligopoly granted by corrupt politicians who even ‘insure’ that debt to ensure banks make their loot.

It is culling time folks and the herd is heading to the slaughterhouse.

Of course everything rises in price creating the fictional story of growth while it only record the destruction of currency by corrupted and clueless idiots in charge.

We have seen nothing yet, we used lower rates so far to only aggressively leverage on debt. Even Australia is starting to deleverage. Not us.

What lies ahead? BoC just acknowledged that deleveraging is not even remotely possible due to economy hooked on credit based mindless consumption. Thinking about it, rate cuts stimulates the economy by incentivising going deeper in debt, what is crazy is that we have already past peak debt long time ago.

Increase in taxes to further squeeze whatever is left in the sheeple’s pockets creates illusion of socialism, while in reality we live in government sponsored bankerism.

With bitcoin you have at least do do some work in order to get it, this is why BoC so much hates it and ‘warns’ cautiously which ‘carefully monitoring it’. It is much better and preferred to be robbed by their friends at the banks.

#34 Sorry on 07.06.19 at 11:17 pm

#25 Flop… on 07.06.19 at 8:24 pm
#21 BOOM! on 07.06.19 at 7:55 pm
Turner Investments mic drop! (Great post, Ryan)

//////////////////

Kindly get yourself another handle please.

That one hangs in the Blog Hall of Fame.

Retired, but not forgotten…

—————–

Meant as a sound effect to the mic drop. Did not mean any disrespect.

M46BC

#35 Not So New guy on 07.07.19 at 12:27 am

I thought it interesting that capitalism was blamed for the 10 million that starved to death every year. I don’t think this is a fair claim. I think this is more a moral issue than an ideological one. The reason I say this is because it would be almost as easy for the communist/socialist countries to address the problem of starvation in our world as it would the capitalist. Sure, the capitalist countries are much wealthier, but because if how little money it would actually take to solve this problem (the last I checked it was something like less than 1% of yearly world income), the blame should fall on all of us

#36 Al on 07.07.19 at 12:35 am

This was an excellent post, good job!

#37 Smoking Man on 07.07.19 at 1:28 am

Life is short

Spend it all.

#38 Not So New guy on 07.07.19 at 1:39 am

#16 Sail Away on 07.06.19 at 7:17 pm

This feels like an unhinged press foaming at the mouth. They do realize that Canada is not the US, and that Canadian papers will not have the slightest influence on US politics, right? What’s the saying, “change the things that you can, accept the things you cannot” ?

=================================

Yes, we also get that on our big talk radio station CKNW in Vancouver. It was worse after the election where often the first ten minutes of the newscast was talking about Trump and nothing about Canada. And the nature of the rants just had me turning the dial or the radio off. I’m sure the advertisers loved that. They are getting better but still, they go off unhinged every once in a while.

You would think they were a branch of the US democratic party or something. It is very bizarre. Do they think there are that many US voters listening to make a significant difference? Maybe that is one of the truest symptoms of TDS

#39 Adin on 07.07.19 at 1:42 am

BobC: Wealthsimple is not great IMHO. They seem to invest too much in marketing and personal account management, and it shows in the 0.4-0.5% fee. The assets they hold also seem to be Canadian, which has some implications, but I’m not sure.

In the U.S., Schwab has a zero fee robo service called “Intelligent Portfolios” with all the standard features (rebalancing, loss harvesting, etc.).

#40 NoName on 07.07.19 at 1:53 am

This video is just for my two eco friendly blog bod Ponzi and Crazy.

Here it is eco friendly non swamp evaporate cooling air conditioner. In my estimation 250cad max to make it (version with liquid desecant and “cooling tower”. dude sad 35w plus 150w for air dryer heater. I am thinking cottage summer project, my only problem is i got no cottage… Pay attention what he says for litium.

https://youtu.be/R_g4nT4a28U

So this one time i am talking to guy hoo was servicing ac unite at old work and i aks him, exact question: “would unit be more efficient if we put mist nozles and spry water mist on a radiator outside?” Dude spend next 30 min explain me how gas would liquefy and compresor would stall and leak and broken and stuff like that. So when he was done i aksed him shold i put umbrella over my ac condensor at home when its raining. He dident want to talk to after that… So what i am saying here, lets colaborate here and save the planet. Non colaborators get taxed more, hows that for good idea?

#41 NoName on 07.07.19 at 1:55 am

this is an interesting read

https://www.latimes.com/world/asia/la-fg-col1-malaysia-durians-china-20190704-htmlstory.html

The world’s biggest emerging consumer market appears firmly in favor of the smell. China’s massive unmet demand for durian is the prime reason the Hong Kong consulting firm Plantations International predicts that the global market for raw durian will reach $25 billion by 2030 — up from $15 billion in 2016.

#42 Robbie on 07.07.19 at 2:01 am

Shame on you, Ryan. You made a clear, reasoned and well presented argument! Unfortunately, the Blog Dogs here won’t have enough to rant about so the comments will be fewer than usual. Likely that’s a good thing! :-)

I am reminded of the quote, perhaps erroneously attributed to Adlai Stevenson, running for U.S. President, after he made a wonderful speech, a woman supposedly said, “Governor, you have the vote of every thinking person!” His reported reply was, “That’s not enough, madam, we need a majority!” Adlai lost the election.

Ryan, I think you have the support of those who appreciate a very well-reasoned, articulate presentation. Unfortunately you very likely won’t have a majority!

#43 APF on 07.07.19 at 2:02 am

Aldo remember that thé net assez value (NAV) is a public data and investors grâce knowing that data from the last day. Si they do not have interest to buy something too much over thé NAV.

As for Wealthsimple, I opened an account to test and they have a great service and I realy liked home easy was everything. But with their 0,5% fee on top of the ETF cost I find it pricey for doing something I like to do (rebalancing).

For someone who want to do nothing more than setup an automatic transfer to an investi fund and doesn t need an advisor, they are perfect. I recommend them to some coworkers and they also liked the ease of use.

#44 APF on 07.07.19 at 2:04 am

Sorry for the errors of my previous post, damn french autocorrector changing my words…

#45 Cdn Expat on 07.07.19 at 2:16 am

Buford Wilson “Then how does it track the S&P 500? The value of the ETF can be independent of the underlying index depending on supply and demand of the ETF.”

I’ve always wondered this myself and I think the answer is that if it did fail to track the index, arbitrage opportunities would arise between the ETF and the index, and for this reason, the market will always bring the ETF back in line with the index.

Another question that hopefully Ryan can help with, how do the ETF creators or APs make money? How do they take their fee for creating and managing the security? Thanks.

#46 MF on 07.07.19 at 3:19 am

30 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 07.06.19 at 10:03 pm

-That’s easy. The best thing about Toronto is that you are not in it.

MF

#47 crowdedelevatorfartz on 07.07.19 at 6:17 am

@50 Years of Maple Leafs

re :Positive Toronto stats…..

Toronto is the center of the universe?
Toronto is never having to say you’re Surrey?
Toronto will never be mistaken for Paris?
Toronto wins the daily dog poop on sidewalk tonnage ?
Toronto’s rotting garbage doesnt smell as over powering as Montreal’s in August?
Toronto has more Margret Atwood parties than the rest of Canada combined?
Toronto is the headquarters of the Communist Broadcasting Corporation?

#48 Troy McClure on 07.07.19 at 6:55 am

Excellent post, Ryan!!! You hit it out of the park this week!

#49 Etfs on 07.07.19 at 7:33 am

Are the future, agreed, with regards to gaining market share. However there is still a place for Mutual funds

There’s good and bad in everything . Approx 15 ETFs close a yr in USA . Why is that given they r so great? Ryan, your article lacked balance . Pity

Last year 383 mutual funds in the USA closed. Balance, please. – Garth

#50 Elcheapo on 07.07.19 at 8:03 am

#46 MF: oh my that is one sick burn. It smells like bbq in here now.

#51 oh bouy on 07.07.19 at 8:17 am

@#47 crowdedelevatorfartz on 07.07.19 at 6:17 am
@50 Years of Maple Leafs

re :Positive Toronto stats…..

Toronto is the center of the universe?
Toronto is never having to say you’re Surrey?
Toronto will never be mistaken for Paris?
Toronto wins the daily dog poop on sidewalk tonnage ?
Toronto’s rotting garbage doesnt smell as over powering as Montreal’s in August?
Toronto has more Margret Atwood parties than the rest of Canada combined?
Toronto is the headquarters of the Communist Broadcasting Corporation?
_____________________

now now children

#52 oh bouy on 07.07.19 at 8:25 am

@#16 Sail Away on 07.06.19 at 7:17 pm
I just read the Globe and Mail Opinion section. Donald Trump’s name or title appears in print 61 times plus his face in a political cartoon. Mostly disparaging, some as descriptors, but definitely none favourable. Justin Trudeau appears in print 6 times. Mostly as a descriptor.

This feels like an unhinged press foaming at the mouth. They do realize that Canada is not the US, and that Canadian papers will not have the slightest influence on US politics, right? What’s the saying, “change the things that you can, accept the things you cannot” ?

If I wanted to read non-stop blather about another country’s leader, I’d generally look at that country’s press. It seems Canada’s press also feels their effort is better spent covering the US, than, say, Canada.
____________________________

honestly, it sounds like you’re the one thats unhinged.
there’s lots to read in the G&M, i’m sure you could find something else if you’re not into that kind of comedy.

#53 BK on 07.07.19 at 8:30 am

Thanks for the insight and thoughtful post Ryan -helps me hold the course!

#54 LP on 07.07.19 at 8:58 am

I’d hoped someone else would ask this so I wouldn’t have to reveal yet more ignorance. But since no-one has asked, I will: what is a FANG stock?

F72ON

FAANG: Facebook, Apple, Amazon, Netflix, Google. – Garth

#55 Flop... on 07.07.19 at 9:43 am

LP 19 at 8:58 am
I’d hoped someone else would ask this so I wouldn’t have to reveal yet more ignorance. But since no-one has asked, I will: what is a FANG stock?

F72ON

FAANG: Facebook, Apple, Amazon, Netflix, Google. – Garth

/////////////////

Hey LP, you could go with what this guy said ( he’s right) but to me a FANG Stock will always be the one that sucks you dry…

M45BC

#56 Flop... on 07.07.19 at 9:53 am

06.19 at 11:17 pm
#25 Flop… on 07.06.19 at 8:24 pm
#21 BOOM! on 07.06.19 at 7:55 pm
Turner Investments mic drop! (Great post, Ryan)

//////////////////

Kindly get yourself another handle please.

That one hangs in the Blog Hall of Fame.

Retired, but not forgotten…

—————–

Meant as a sound effect to the mic drop. Did not mean any disrespect.

M46BC

////////////////////

No problem, we’re cool.

It’s not the first time this has happened and won’t be the last.

It’s a nickname that I gave him and he decided to switch over from Retired Boomer WI to Boom, so it’s just another one of our connections we made while he was on the blog.

He’s gone, not coming back, but as long as I’m on the blog I will try to protect Roy H. Stacey’s legacy the best I can.

He was a good man, I miss him, it’s the least I can do…

M45BC
M64WI

#57 crowdedelevatorfartz on 07.07.19 at 10:20 am

@#51 Oh Bouy

Yeah, I guess that snide swipe at the CBC was a little harsh….

#58 dharma bum on 07.07.19 at 10:51 am

RE: 50 YEARS OF MAPLE LEAF INCOMPETENCE!

Some More Great Things About Toronto:

Overflowing with pseudo vegans

Idiots walking around calling it “The Six”

Lotsa Obese females (aka: fat chicks)

Drake (gag)

Filth ridden downtown streets

Choking summer humidity

Potholes-a-plenty

Teeming with homelessness

Gnarly traffic jams

Makework construction on every corner

Antiquated subway system to nowhere
(“As an addition to Toronto’s fraying infrastructure, the Sheppard subway is largely untroubled by urban bustle. The stations possess the discreet majesty of abandoned cathedrals, designed for vastly more people than currently use them, like ruins that have never been inhabited. Meanwhile, in the overcrowded downtown lines, passengers are stacked up the stairs. The streetcars along a single main street, Spadina, carry more people on a daily basis than the whole of the Sheppard line, whose expenses run to roughly $10 a passenger, according to one estimate. A critic has suggested that sending cabs for everybody would be cheaper.” – The Guardian)

It is the most diverse city in the world and one of the richest, but it is unclear what its money and its diversity amount to. There is no Toronto sound. There is no Toronto flavour. There is no Toronto scene. There is no Toronto style. Rather there are sounds and flavours and scenes and styles borrowed from elsewhere.

Obscenely overpriced houses

Wall to wall hideous condos obscuring the waterfront

The whole downtown area smells like a vat of urine, onions and car exhaust being boiled together with just a dash of feces sprinkled on top.

Soulless and artificial

Bedbugs

Cultural vacuum

Atmosphere of indifference, sprinkled with annoyance

To be continued……..

#59 Smoking Man on 07.07.19 at 11:22 am

You’re not a pro till you wake up and a hung over feels wonderful.

#60 Shawn Allen on 07.07.19 at 11:31 am

The gap between the Rich and most people in developed countries

#104 MaryEn on 07.06.19 at 12:06 am responded:
@SunShowers

I didn’t get your point. Thanks to capitalism, the gap between rich and poor people has never been smaller (yes, smaller!) as today. Compare an average worker in any developed country with Bil Gates or any other billionaire and see what we gonna find? A both have place to live, food as much as they can eat, cars, possibility to travel, access to medicine, opportunity to learn, develop their interests, skills, hobbies… I can’t find any such a huge difference that bothers me. We (employees) probably have even more time and far less responsibilities. Sorry, but I can’t find anything so unfair here and have to agree with Margaret Thatcher :

https://m.youtube.com/watch?v=rv5t6rC6yvg

*****************************
Excellent points. Even the poor in developed countries almost always have access to the basic necessities of lie. And most people have an abundance of necessities plus access to a good many luxuries (entertainment, travel, free time, and much more).

For traveling long distances, Bill Gates faces about the same time as the rest of us except he is on a private jet noshing on fine dining while we are crammed inot uncomfortable tiny seats. But is that really a huge gap.

Buffett says his wealth gives him billions of dollars in “claim checks” on the goods and services the economy produces. But he says he could never possibly cash in more than a tiny fraction of those claim checks. If he is worth roughly $80 billion that is 100,000 times more than someone who is worth $800,000. But he will never come remotely close to consuming 100,000 times more food or housing or clothing or travel or even personal services of domestic help.

The gap in wealth is far larger than the actual gap in life styles and consumption. That is something to think about.

#61 Shawn Allen on 07.07.19 at 12:00 pm

Stan Brooks on Banking said above at 33:

credit is post-stamps called currency, issued by lenders at will with no backing as deposits and represents no past labour or sale of assets. It is made up ‘money’ that has to be repaid back with interest that does not exist. Hence the paradox of ever increasing debt while savings decrease and are virtually non existent. How is that different from counterfeiting? You have to return it with interest that you have to earn, that is the nice part.

***************************
This wrong-headed erroneous victim oriented view has not been informed by any kind of glance at bank balance sheets.

Perhaps Stan has no bank deposits. Loans are not “backed” by deposits they are “funded” (largely) by deposits owned by bank customers. The “backing” is in the share holder and bond investor capital that typically amounts to roughly 12% of the bank’s assets (which are mostly loans).

Stan may not have any bank deposits but others do. Black Sheep can explain how a loan and a deposit are simultaneously created. After the loan is “spent” the person or corporation who received the funds from the loan owns the deposit. They earned it in return for their house or whatever ever else they provided to the person who got the loan.

One man’s debt is a another man’s savings. Loans and deposits in the banking system increase in lockstep. I certainly consider any bank deposits I have to be my savings. How about you readers? It’s not my concern that someone who bought a house I sold borrowed the money. I got the same bank deposit whether the buyer of my house paid with his savings or a new loan.

Stan appears to espouse a victim mentality.

Listen instead to Charlie Munger who said about getting wealthy “Figure out what works, and then do it”. That actually applies to everything in life.

#62 Long-Time Lurker on 07.07.19 at 12:06 pm

Here, Smokey. The NASA Mars Rover might have taken a photo of a flying bird on Mars at the top left of the photo.

https://marsmobile.jpl.nasa.gov/msl/multimedia/raw/?rawid=NRB_614635188EDR_S0760988NCAM00595M_&s=2446

#63 Sail Away on 07.07.19 at 12:14 pm

#52 oh bouy on 07.07.19 at 8:25 am
@#16 Sail Away on 07.06.19 at 7:17 pm

This feels like an unhinged press foaming at the mouth. They do realize that Canada is not the US, and that Canadian papers will not have the slightest influence on US politics, right? What’s the saying, “change the things that you can, accept the things you cannot” ?
____________________________

honestly, it sounds like you’re the one thats unhinged.
there’s lots to read in the G&M, i’m sure you could find something else if you’re not into that kind of comedy.

———————————

Noted. I moved on to the crossword. It’s been good.

#64 Shawn Allen on 07.07.19 at 12:20 pm

Savings and Money

The nature of money and its creation is no easy topic. Money is an intangible way that we account for wealth and ownership.

The true physical savings of the world consists of all the things and knowledge humanity has created. The buildings, the roads the cars, the cloths, the food stock piles, the factories, the ships, the planes, the pipelines, the stock piles of commodities and on and on. Also very importantly the know-how, the medical knowledge, the knowledge of how to farm and how to manufacture and so much more.

These things exist and are the collective savings of humanity. Add to that the natural wealth of the land and sea.

Now, enter money. It accounts for who owns what. Who has a claim check on the stock of physical savings and on the flow of annual production of consumables.

It may be that all money is a form of credit.

Money is also a powerful incentive for people to work hard and create more things and knowledge. Money and credit are the grease of the economy.

And it works wonderfully. Money and credit are an essential part of the success of humanity in creating great abundance collectively.

All hail money, credit and banking!

#65 crowdedelevatorfartz on 07.07.19 at 12:46 pm

@#58 Dharma
re; Toronto

“The whole downtown area smells like a vat of urine, onions and car exhaust being boiled together with just a dash of feces sprinkled on top.”
++++++

Perhaps we could refer to it as “Eau de Outremont”?

As for the rest of your Torontonian observations…..100% thumbs up.
The Sheppard Station….Mel Lastmans ‘s final hurrah?

#66 MF on 07.07.19 at 12:49 pm

58 dharma bum on 07.07.19 at 10
47 crowdedelevatorfartz on 07.07.19 at 6:17 am

-Look at who didn’t get the memo about not feeding trolls.

Lol

And just lol at your “complaints”. Jealousy and envy emanating so strong my phone felt radioactive while reading them.

My take is Toronto has already moved passed people like fartz and dharma. Now they are left in the dust frustrated and disoriented.

The only viable response: complaints and whining.

MF

#67 Sam on 07.07.19 at 12:52 pm

Own both etfs and mutual funds. Certain managers i have no problem paying for their skill. F series only

Thank you quest trade!

#68 Stan Brooks on 07.07.19 at 1:16 pm

#61 Shawn Allen on 07.07.19 at 12:00 pm

You continue to be annoyingly persistent in your ignorance.

When a loan is made by a bank, simultaneously a deposit (other deposit for the bank owned by no one but the bank, but claimed as a liability) and an asset (your loan) is created. When the ‘money’ is transferred to the seller account it is transferred as new money that did not exist before (where was it before the loan, help me here?). So the bank made some money + interest out of nothing and got an asset for nothing.

Deposits are needed to fund withdrawals and cash outs/transfers out from the bank, i.e when and if the seller withdraws the money from the banking system in cash.

Most of the transactions are electronic though and with unlimited liquidity provided at will by the central bank banks need no or very limited deposits.

Money is destroyed when debt is paid off completely which is of course never as the money to repay it does not exist.

How stupid can one be to state that loans are based on deposits when debt grows much faster than savings that actually shrink?
Hello? Are all two neurons working there?

I posted a link here a few days ago how deposits are not needed to originate loans, did you read it?

https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp

here is the essence of it:


Banks in the Real World
In today’s modern economy most money takes the form of deposits, but rather than being created by a group of savers entrusting the bank withholding their money, deposits are actually created when banks extend credit (i.e., create new loans). As Joseph Schumpeter once wrote, “It is much more realistic to say that the banks ‘create credit,’ that is, that they create deposits in their act of lending than to say that they lend the deposits that have been entrusted to them.”

Banks earn all the proceeds from your asset/loan, including the interest that never existed as money in first place.

#69 Stan Brooks on 07.07.19 at 1:27 pm

#61 Shawn Allen on 07.07.19 at 12:00 pm

Ah, and if the bank has a problem with liquidity i.e. no deposit reserves, the central bank steps in conveniently and buys/converts the asset/your loan into cash for the bank, the process is conversion of credit into cash, M1 hard cash that then funds further loans.

You still own your loan though, it is administered by the bank.

So now the bank got the cash to multiply and produce multi M2 to cover the deposit to the seller in our case.

Gain on interest + difference in the generated M2 – the seller deposit.

No customer deposit needed.
Capishe?

#70 Flop... on 07.07.19 at 2:14 pm

#32 Ryan Lewenza on 07.06.19 at 10:38 pm
Flop ““First the important stuff. I have to give a shout out to our Raptors, the 2019 NBA champions! Being a long-time fan and a proud Torontonian, I couldn’t be happier for our team who played their butts off and showed incredible grit, determination and team work. We can all learn something from that team and their season. Now let’s re-sign Kawhi and go back-to-back next year, when we’re all collectively chanting “let’s go Raptors!”

My old buddy Ry, you wrote this during your last at bat.

I think you might have jinxed it.”

//////////////////

Agreed. Not a great day for our Raptors and our city. But Kawhi brought us a championship which we can all be proud of. – Ryan L

////////////////

Many a basketball pundit got paid many-a-thousand to walk us through what was going to happen.

They failed miserably, maybe they would have had better luck on BNN.

Here’s one thought to cheer up Raptors fans.

The Clippers got to play The Home Card, in the coming years the Raptors will get to do the same thing.

I think six Canadians got drafted this year, and some of these guys are not make up the numbers types, they and some already established players are budding superstars.

Next year might be just a stay healthy, see what happens in the finals, type of year and could make hay next free agency.

This one will sting, but winning cures a lot of problems and Toronto is no longer the laughing stock of the league.

That honour falls to The Knicks…

M45BC

#71 crowdedelevatorfartz on 07.07.19 at 2:22 pm

@#66 MF
“Jealousy and envy emanating so strong my phone felt radioactive while reading them.”
+++++

“Jealousy and envy”.
Hardly.
But those emotions a potential renewable energy source?
Bwahahaha.
Perhaps.
If only we could harness all that negative Canadian energy….perhaps we could eradicate Ontario’s industry crushing nuclear bill…..?

Toronto loathing.
I’d call it a genuine visceral response to the endless, insufferable, self promotion that “Toronto the Great” inflicts upon the rest of Canada…. day in a day out.

The breathless national TV coverage of the Raptors celebration …but one of many ad nauseum, navel gazing fetes hauled out on the rest of Canada whether we want it or not.

And less than a week later the star player ( Ka Why) of the team sneaks out of town on a private jet to sign with the Clippers……so much for team allegiance….its about da cash baby.
Seems Toronto the Great didnt have enough going for it (financially or otherwise) to keep the satr in town….

The Canadian tv coverage of the slow motion SUV driving on the airport tarmac in California reminded me of another SUV in California decades ago……OJ Simpsons ill fated escape attempt.
I wondered what horrible crime warranted such live tv coverage until I realized Torontonians expect ( nay demand) to know when their “heros” become “traitors”

One can’t wait to see the reaction in Toronto next season when their former hero crushes the Raptors with a humiliating defeat.
Riots? Protests? Demands for social awareness?

Jealousy?
Please.

Toronto , another large, flat, boring, anonymous, cookie cutter metropolitan North American city yearning for… but never really achieving ……greatness…….. yawn.

#72 Shawn Allen on 07.07.19 at 2:24 pm

Stan on Ignorance and Banking

#68 Stan Brooks on 07.07.19 at 1:16 pm
#61 Shawn Allen on 07.07.19 at 12:00 pm

You continue to be annoyingly persistent in your ignorance.

When a loan is made by a bank, simultaneously a deposit (other deposit for the bank owned by no one but the bank, but claimed as a liability) and an asset (your loan) is created. When the ‘money’ is transferred to the seller account it is transferred as new money that did not exist before (where was it before the loan, help me here?). So the bank made some money + interest out of nothing and got an asset for nothing.

********************************
Thanks Stan. Yes I am persistent in trying to educate and correct against ignorance. Hopefully without either of us being ignorant to each other.

You appear to have a bit of knowledge and apparently not having any accounting knowledge have misinterpreted things.

The created deposit you speak of is owned to the person who took out the loan at the moment of simultaneous creation. The borrower gets a loan (liability) and a deposit) asset with no change in net worth.

The bank gets an asset (the loan owed as you acknowledge) and a liability (the deposit) which you apparently don’t accept is a liability.

If the loan is used to buy a house the deposit gets transferred to the seller of the home and the deposit is his savings. Have you ever sold a home for a cash deposit like that?

You are quite right that the money was created by the bank together with the borrower. The house of course is the only “real” asset here.

You appear to confuse cash on the left hand side a bank’s balance sheet (as asset) with deposits on the right hand side (a liability). Most deposits fund loans. Banks keep minimal cash on their balance sheet.

Stan, I think you would be better off to open your mind a bit more and stop claiming to be a victim of banking and stop claiming that the “sheeple” are victims of banking. Most are not. What is especially dangerous is your possible impact in misleading others.

The internet allows even the most uninformed of voices to be heard. Readers need beware. They can judge who is uniformed and uneducated about banking you, or me.

Each of us can choose to be a victim or not. One aspect of Trump that is admirable is his clear choice to be a winner. I like winners more than false victims

Now, I must get back to my reading of Canadian Western Bank’s Q2 report. I am an owner and I have been reading their financials closely for twenty years now. Anyone is free to buy their shares or to get a financial ETF of banking shares.

#73 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 07.07.19 at 2:32 pm

Thanks to all of you for your suggestions, and especially to dharma bum and crowdedelevatorfartz, whose observations about are Toronto are so positively truthful.

This has helped open a new window for me into just how special Toronto is – more on that later!

(I can’t wait to tell you all!)

#74 Ryan Lewenza on 07.07.19 at 2:57 pm

Can Expat “Another question that hopefully Ryan can help with, how do the ETF creators or APs make money? How do they take their fee for creating and managing the security? Thanks.”

On the spread. If they can make a few cents here and there between the bid and ask and multiply this by thousands of trade they can make a bit of profit. No one does anything for free especially in finance. – Ryan L

#75 Ryan Lewenza on 07.07.19 at 3:08 pm

Etfs “There’s good and bad in everything . Approx 15 ETFs close a yr in USA . Why is that given they r so great? Ryan, your article lacked balance . Pity”

What Garth said. Plus ETFs close all the time largely due to insufficient trading volume and assets. For example, say an ETF launches a new ETF to track natural gas and it doesn’t get enough assets or trading volume then they shut it down and return the Net Asset Value (NAV) to shareholders. But it’s important to stress that investors don’t lose their investment in the ETF. The ETF company simply returns the NAV of the fund to ETF holders. – Ryan L

#76 mike from mtl on 07.07.19 at 3:27 pm

#49 Etfs on 07.07.19 at 7:33 am
Are the future, agreed, with regards to gaining market share. However there is still a place for Mutual funds

There’s good and bad in everything . Approx 15 ETFs close a yr in USA . Why is that given they r so great? Ryan, your article lacked balance . Pity
/////////////////////////////////////////////////////////////////////

Yes but would be surprised if the ones dumped are not weird and or thinly traded ones. Mutuals do this all the time – or worse they get new ‘management’. Big and highly traded ones, example, VCN, XIC or VOO are probably not going anywhere.

Mutuals do have their place though, biggest would be partial units. Great for tiny and frequent transactions, ETFs get unwieldily at less than 2k amounts being most are in 20-50$ range. Plus you have transaction fees.

Probably why most group RRSP, pensions and so on continue to use them hence they’re not going anywhere fast. There is such a thing as passive index mutuals but they’re almost never offered, 99% would be some sector specific ‘active’ fund.

#77 Ryan Lewenza on 07.07.19 at 3:30 pm

dharma bum “RE: 50 YEARS OF MAPLE LEAF INCOMPETENCE!

Some More Great Things About Toronto:

Overflowing with pseudo vegans

Idiots walking around calling it “The Six”

Lotsa Obese females (aka: fat chicks)

Drake (gag)

Filth ridden downtown streets

Choking summer humidity

Potholes-a-plenty

Teeming with homelessness

Gnarly traffic jams

Makework construction on every corner”

Lots of hate being directed to T.O. so I’m going to provide some counterarguments. How about the fact that Toronto is one of the most dynamic and vibrant cities in Canada and possibly in the world. It’s one of the most multicultural cities around providing lots of different cultures, food, events etc. Toronto’s economy is doing great with lots of job opportunities, a low unemployment rate, new areas of growth in technology, AI, robotics etc. It offers lots of different sporting events and teams to follow, even with our disappointing Maple Leafs. Heck we just won the NBA championship, which energized the city and nation and put us on the map. And since I’m a Drake fan I think he’s great for the city.

I get it, its not perfect and it has some real issues to deal with as does any major city but from my perspective this is a great place to live, to work, and raise a family. But this is me speaking, Garth has had enough of this place. And maybe one day I will grow tired of it but for now there’s no other place that I want to be. – Ryan L

#78 Stan Brooks on 07.07.19 at 3:59 pm

#72 Shawn Allen on 07.07.19 at 2:24 pm

You just acknowledged that:
New money were created in the loan process that did not exist before. What good was created in the process? None.

So you have more money chasing same amount of goods, i.e. inflation.

You did not say how the money to pay the interest on the loan is created. It simply does not exist. How are you going to earn it if it does not exist?

You also said nothing about the process of conversion of loans, i.e M2 into M1 through purchase of assets.
In US they are held at the Fed. Here they circulate in the economy + we have no deposit reserve requirements.

If loans were based on capital or existing deposits we would have had very different debt picture.

———————————————–

#77 Ryan Lewenza on 07.07.19 at 3:30 pm

Toronto does not have the infrastructure of a big city, housing is severely unfavorable while people earn little, we have long commutes, stressed out people, roaring inflation, not much to do on the weekend.

It has severely deteriorated in quality in the last 2-3 decades, it was much much more enjoyable at the time.

The trend is not good.

Drake fan? That tells it all.

#79 oh bouy on 07.07.19 at 4:21 pm

@#58 dharma bum on 07.07.19 at 10:51 am
RE: 50 YEARS OF MAPLE LEAF INCOMPETENCE!

Some More Great Things About Toronto:

Overflowing with pseudo vegans
_______________________________

Bwahahaha, you two losers are kindred spirits.
you should join stan in his basement apartment.
Unless of course you’re all the same poster.
similar intelect so most likely.

#80 oh bouy on 07.07.19 at 4:24 pm

@#71 crowdedelevatorfartz on 07.07.19 at 2:22 pm

______________________________

honest question.
What’s the matter with you?
what happened in your life?
cheer up, get some sunshine and make something of yourself.

#81 crowdedelevatorfartz on 07.07.19 at 4:39 pm

@#80 Oh Bouy
“What’s the matter with you?
what happened in your life?
++++

Truth be known.
I spent a week in Toronto….
Ruined me for life.

:)

#82 Cdn Expat on 07.08.19 at 5:49 am

#74 Ryan Lewenza on 07.07.19 at 2:57 pm
Can Expat “Another question that hopefully Ryan can help with, how do the ETF creators or APs make money? How do they take their fee for creating and managing the security? Thanks.”

On the spread. If they can make a few cents here and there between the bid and ask and multiply this by thousands of trade they can make a bit of profit. No one does anything for free especially in finance. – Ryan L

But surely it’s not the ETF provider making the spread. It’s the market who makes the spread….

#83 Cdn Expat on 07.08.19 at 5:51 am

…if in fact you mean the spread between bid/offer on the ETF…

#84 Kyle Furness on 07.09.19 at 4:17 am

Hey Garth. I make my 17 and 16 yr olds give me 10% of their net pay each month which I tell them is for long term growth(retirement, not a car or condo or house or anything), I have showed them how compounding interest works and they are on board. I made 40% for my son in Facebook and now have their money in a speculative stock I believe in. Once I get their money out of there, where do I put it? Its all in my TFSA and when they age up I will put it in theirs. An S&P 500 ETF or what? Should be very very long term, like 40-50 years, and I don’t want them to need to look at it for seven years or so until they are done school etc. Any thoughts? Thanks