Portfolio Management • Independent Research • ETF Newsletter

ETF Research and Management Services

Why ETF's?

Instant Diversification
The purchase of a single ETF gives investors exposure to a basket of stocks creating diversification and eliminating company-specific risk.
Tax Efficiency
Due to low turnover, most ETF’s do not have large capital gains that need to be paid out to investors which result in “phantom income”. Mutual funds on the other hand are known for paying out year-end capital gains even if the mutual fund has lost value.
Intraday Pricing
An ETF can be bought and sold throughout the regular trading session in the same manner as a stock. A mutual fund can only be bought or sold at the Net Asset Value, which is computed at the end of the trading session.
Low Expense Ratios
The annual expense ratio of ETF’s is lower than that of mutual funds. For example the Vanguard Emerging Markets ETF (VWO) has a low annual expense ratio of 0.3%. The category average for an emerging markets mutual fund is 1.83%. Over time this will eat into your profits.
Low Fees
The cost of buying and selling an ETF is the same as an individual stock. Some mutual funds charge loads that can be as high as 5% of the initial investment.
Passive Investment Vehicles
ETF’s are passive investments that track a set index and the composition is only changed a couple times per year. Most mutual funds are actively managed and therefore trades are taking place daily. The chance of your mutual fund outperforming the market by trading is approximately 20%.
Ability to short and buy on margin
Traders that would like to bet against a specific ETF moving higher can “short sell” the ETF. Investors also have the ability to leverage their account with margin when buying ETF’s.
Convenience
ETF’s can be purchased the same way as a stock through an online brokerage firm. When it is time to sell it can also be done online with the mere cost of making a stock transaction.
Exposure to niche sectors
A new advantage of ETF’s is exposure to niche areas in the market that mutual funds do not offer. For example, there is a water infrastructure ETF, an ETF that concentrates solely on Singapore, or an ETF that moves with the price of natural gas futures.
Transparency
Nearly all ETF’s track an index that is reallocated wither every quarter or twice per year. Therefore, on any given day you can determine what stocks make up your ETF’s.

Contact us to learn more about our ETF Research and Management Services

Penn Financial Group
137 Ackerman Ave
Ridgewood, NJ 07450

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Portfolio Management Services
Penn Financial Group (PFG) offers long-term investment advice and research for individual investors, small businesses, and institutional clients. We realize it is impossible to completely eliminate risk when investing in the stock market; however we strive to identify investments that offer attractive reward-to-risk setups.

401k Management Services
Penn Financial Group (PFG) realizes that a large number of investors have a significant portion of their investable assets in company-sponsored retirement plans such as 401K’s and 403B’s. Often times the investment options are limited to a small number of mutual funds. Because most mutual funds lag the performance of their benchmarks it is imperative to allocate your money into the best mutual funds for the current market environment.

PFG Covered Call Strategy
The PFG Covered Call Strategy is available for clients that range from conservative to aggressive as each option is covered by owning the underlying stock. We realize that when you hear the term options the first thought is “risky” or “aggressive”. That could be the case, but with the PFG Covered Call Strategy we strive to ultimately protect our new and existing positions and will create income in the process.