Don Dion's 10 Most Dangerous ETF List
- Joshua M Brown
- September 22nd, 2009
If you haven't already, run on over to TheStreet.com to read Don Dion's first installment of the 10 Most Dangerous ETFs list.
In light of the over-abundance of these products and the fact that many of them have not raised nearly enough assets to justify their existence, now is a great time to bone up on the risk that can be involved with a faulty exchange traded fund.
Here's number 10:
10. Elements Benjamin Graham Large Cap Value ETN (BVL).
BVL tracks large, liquid companies like Alcoa, Wyeth and Allstate, but is one of the most illiquid ETFs on the market today. This ETF is one of the smallest of all time, with a market cap of just $1.3 million and a three-month average daily trading volume of 173 shares.
It is the lack of investor interest in BVL, rather than its methodology or holdings, that makes this fund dangerous. Illiquid funds can be difficult to trade in and out of, and for a 0.75% management fee, investors can do better. Avoid the trilogy of unsuccessful Benjamin Graham funds, which includes BVL, Elements Benjamin Graham Small Cap Value ETN and Elements Benjamin Graham Total Market Value ETN.
Great work so far, Don.
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The Reformed Broker is a blog about financial markets and the economy. Joshua Brown is a New York City-based investment advisor for high net worth individuals, charitable foundations, retirement plans and corporations... More.