Long Duration & High Fees

Australia

BetaShares lists world’s first global ultra-long duration bond ETF

BetaShares is listing the world’s first ETF that invests exclusively in global bonds with 20+ year duration.

The BetaShares Global Government Bond 20+ Year ETF (GGOV) will track an index of sovereign bonds with maturities greater than 20 years issued by G7 countries. (USA, Japan, Germany, United Kingdom, Italy, France and Canada). Bonds with negative yields are excluded from the index. 

TickerFund NameExpense ratioCurrency hedged? Weighted average maturity (years)
GGOVBetaShares Global Government Bond 20+ Year ETF 0.22%Yes27.63

The fund buys bonds issued in local currencies, and then hedges the exposure back into Aussie dollars.

There are some bond ETFs – such as Vanguard’s EDV, which is listed in the US – that invest exclusively in ultra-long maturity bonds. But GGOV will be the world’s first to target ultra-long maturity G7 bonds.

Analysis – good product, right decision

Since the rise of what is called “neoliberalism” in the 1980s, governments around the world have made it clear that they will do everything in their power – fiscal or monetary – to stop asset prices from falling. The assets of concern being financial assets like property, shares, bonds. 

Interest rates play a crucial role in setting asset prices as they determine how cash flows are valued. The lower interest rates go, the higher asset prices correspondingly go, as the value of their cash flows gets mechanically revised upwards. (In trading, the value of everything is relative). A side effect of sustained low interest rates is that the gap between the rich and the poor grows wider. Rich people are the ones that own assets and the primary benefactors of low interest rates.

With this in view, long maturity bonds – preferably as long as possible – is where you want to be. After all, if interest rates are a one-way bet – and I believe they are – then going long on maturity is just free money.

I’m going to buy this ETF. 

USA

Tuttle launches active fund of funds ETFs with extreme fees

Tuttle Asset management, a small ETF shop based in Connecticut, is listing a suite of new actively managed fund-of-fund ETFs that charge 20th century style fees. All of the funds use secret research and models to jump between ETFs, ETNs and various asset classes when needed.

Fund NameTickerFee
Trend Aggregation Aggressive Growth ETFTAAG1.87%
Trend Aggregation Dividend Stock ETFTADS1.87%
Trend Aggregation U.S. ETFTAEQ1.87%
Trend Aggregation ESG ETFTEGS1.87%

TAAG looks for companies with strong price momentum and companies that are potentially oversold. The fund can also use volatility ETNs along with inverse and leveraged ETPs, the prospectus indicates.

TADS buys ETFs with companies that have dividend growth, liquidity, sector diversity, and potential for capital appreciation in the near term.

TAEQ buys US equity ETF using a trend following strategy. It looks to buy securities experiencing short-term weakness and sell securities that are experiencing short-term strength.

TEGS buys American ETFs and securities with some ESG considerations, including: energy use, waste, natural resource conservation. Beyond this not much specific is said.