Canadian Money Forum banner

1 - 9 of 9 Posts

·
Registered
Joined
·
2,925 Posts
Discussion Starter #1
What do you guys think of the new seasonal ETF by the Horizon Funds. I really like Don Vialoux who will have his hands on this, check it out here http://www.hapetfs.com/hac.asp

I like the idea of this fund even though nothing is for sure especially if everyone starts buying into seasonal investing.
 

·
Registered
Joined
·
13 Posts
This is an interesting concept. I think we'll start seeing more of these actively managed ETFs in the future.

What do people think about the inclusion of a performance fee (20% over High Water Mark & 5% annualized hurdle rate)? The incentive to outperform is there while the high water mark should keep them from taking on excessive risk.

After taking a second look, it looks like it will be made up primarily of other ETFs. If the information is available, another idea could be to look at their top holdings and buy those ETFs yourself to save on fees.
 

·
Registered
Joined
·
2,925 Posts
Discussion Starter #3
Don Vialoux likes to use ETF's when he sees a seasonal play set up along with the technicals. What I find interesting is to see how this fund will do over time using these methods. Because for once we may be able to see something perform in the now without the usual looking to the past to validate what you are selling. As you know you can make many ideas look good using the past.
 

·
Registered
Joined
·
24 Posts
Anyone touting these alpha funds from Horizons cannot be taken seriously. They are just like the leveraged etfs, absolutely useless and just taking advantage of the naive or inexperienced.

HAX run by technical guru Meisels (winner of the best technical analyst for a few years I believe), the guy who is on BNN all the time has underperformed the TSX index by 50% since he started earlier this year. I use technicals because I think they have some merit but you show the same chart to some of these guys, maybe a chart where a company used to have a higher stock price and now it has been in a trading range for a while. If he likes the stock then he will say it is building a base and buy it on the breakout. But if he does not like the stock, it is underperforming and would avoid.

HAG run by newsletter guru Gartman, the guy on all the fast money shows who wakes up at 1am to check the overseas markets and writes a newsletter that wall street likes, has LOST money since he started earlier this year despite being in the greatest bull market in history.

HAF.UN run by some bond wizards has lost money since it started in August.

This new seasonal ETF will be useless too. Don't be fooled by charisma and showmanship. They don't know what the hell there doing. LOL.

On a side note, I think it is the HAX that is a reincarnation of the Ross Healy fund that was renamed and reconfigured but I am not sure. Healy's fund was another fund that underperformed.
 

·
Registered
Joined
·
274 Posts
This is an interesting concept. I think we'll start seeing more of these actively managed ETFs in the future.

What do people think about the inclusion of a performance fee (20% over High Water Mark & 5% annualized hurdle rate)? The incentive to outperform is there while the high water mark should keep them from taking on excessive risk.

After taking a second look, it looks like it will be made up primarily of other ETFs. If the information is available, another idea could be to look at their top holdings and buy those ETFs yourself to save on fees.
Holdings are reported at best on a monthly basis, there is no way you can successfully copy a rotational investment vehicle using out of date data. Of course we don't even know if anyone would want to copy this at this point.
In reality just another in the long and ever growing line of investment gimmicks in the desperate attempt to drum up business in the absurdly bloated investment marketplace. Though you do need to give props to the more intriguing ideas.
 

·
Premium Member
Joined
·
2,686 Posts
What do people think about the inclusion of a performance fee (20% over High Water Mark & 5% annualized hurdle rate)? The incentive to outperform is there while the high water mark should keep them from taking on excessive risk.
Do these ETFs charge 20% of gains over 5%? I think the incentive here is structured in such a way to benefit the manager and hurt the investor. Suppose the manager takes on huge risks and makes 55% in Year 1. Their fee is 10%. Next year, the risks catch up with the fund and it loses 50%. Manager makes 0%. The investor has lost money but the manager ends up with an annualized 5% in fees. I don't see how an incentive structure such as this aligns the interests of managers with that of investors.
 

·
Registered
Joined
·
15,839 Posts
right again cc. So is res inv. So is the mohgge. Why are we discussing this nebbishy thing.
 

·
Registered
Joined
·
13 Posts
Do these ETFs charge 20% of gains over 5%? I think the incentive here is structured in such a way to benefit the manager and hurt the investor. Suppose the manager takes on huge risks and makes 55% in Year 1. Their fee is 10%. Next year, the risks catch up with the fund and it loses 50%. Manager makes 0%. The investor has lost money but the manager ends up with an annualized 5% in fees. I don't see how an incentive structure such as this aligns the interests of managers with that of investors.
You're definitely right about that. It's the high watermark that keeps them in line though. It essentially means that if they lose in a given time period, they get nothing (except the normal MER of .75% that is). They only will get performance fees on returns once they get back to the previous high, even if it takes years. This way, they're only rewarded for taking acceptable risks (hopefully).
 

·
Registered
Joined
·
2,925 Posts
Discussion Starter #9
Mogul says it best, "Holdings are reported at best on a monthly basis, there is no way you can successfully copy a rotational investment vehicle using out of date data. Of course we don't even know if anyone would want to copy this at this point.
In reality just another in the long and ever growing line of investment gimmicks in the desperate attempt to drum up business in the absurdly bloated investment marketplace. Though you do need to give props to the more intriguing ideas."

I like talking about the short term and technical analysis and so on because I find it entertaining. Talking about the long term is of course right but it is not as much fun. Also I find that it does help you the more you get exposed to this short term thinking as you do start to develop better entry points and start to see patterns without thinking to much about it. It is also interesting to see how complicated technical analysis becomes as people try to find reasons why they failed and then it gets more complicating when they need to fine tune it because they failed again and so on.
 
1 - 9 of 9 Posts
Top