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Author Topic: BNPUSA tracking better than DBXUS  (Read 11500 times)

jonb

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BNPUSA tracking better than DBXUS
« on: February 03, 2016, 02:52:27 pm »
I was looking at the difference between DBXUS and BNPUSA and it seems BNPUSA has outperformed the DBX US tracker buy a few % over the last year... also if you look shorter term over this past rough patch its seems to have tracked way better

Anyone know why?
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Hamster

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Re: BNPUSA tracking better than DBXUS
« Reply #1 on: February 03, 2016, 04:05:21 pm »
Never heard of these (BNP) before. Looks very attractive.
« Last Edit: February 03, 2016, 04:07:01 pm by Hamster »
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Nivek

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Re: BNPUSA tracking better than DBXUS
« Reply #2 on: February 03, 2016, 04:28:50 pm »
I have to put this here, from Investopedia
Quote
An ETN is more like a bond. It's an unsecured debt note issued by an institution. Just like with a bond, an ETN can be held to maturity, bought or sold at will, and if the underwriter (usually a bank) were to go bankrupt, the investor would risk a total default.
http://www.investopedia.com/financial-edge/0213/etf-or-etn-whats-the-difference.aspx#ixzz3z7CZO7Bg
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jonb

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Re: BNPUSA tracking better than DBXUS
« Reply #3 on: February 03, 2016, 05:17:49 pm »
actually did some research and the BNPUSA is a smart ETN, so there is some tweaking while the DBX vehicles are just plain index trackers

Apparently not around long enough to really prove a benefit as they still pretty new to market but if I look at the last year result plus over the past 3 months especially looks like it weathered far better

Interesting!
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Orca

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Re: BNPUSA tracking better than DBXUS
« Reply #4 on: February 03, 2016, 05:23:03 pm »
DBXUS pays dividends. BNPUSA does not. Also, the latter you will have to buy off market as it is not liquid at all.
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jonb

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Re: BNPUSA tracking better than DBXUS
« Reply #5 on: February 03, 2016, 05:23:10 pm »
Quote from: jonb on February 03, 2016, 05:17:49 pm
actually did some research and the BNPUSA is a smart ETN, so there is some tweaking while the DBX vehicles are just plain index trackers

Apparently not around long enough to really prove a benefit as they still pretty new to market but if I look at the last year result plus over the past 3 months especially looks like it weathered far better

Interesting!

Thanks Nivek

Explains a lot, worrying to hear that if the bank backing this gets a downgrade you will see an unrelated downturn... good to keep an eye on BNP then!

This made me think then of any SA ETN's which are backed by SA banks ( ABSA? ) a downgrade could be a bit negative!

Something to factor in I guess!
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jonb

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Re: BNPUSA tracking better than DBXUS
« Reply #6 on: February 03, 2016, 05:25:52 pm »
Quote from: Orca on February 03, 2016, 05:23:03 pm
DBXUS pays dividends. BNPUSA does not. Also, the latter you will have to buy off market as it is not liquid at all.
'

@Orca

Thanks! that is very interesting .... is the result on Bloomberg/morningstar including dividends for DBXUS ? i was sure they included dividend

Could you explain off market? and the liquid comment?
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Fawkes85

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Re: BNPUSA tracking better than DBXUS
« Reply #7 on: February 03, 2016, 05:49:21 pm »
Just thought I would add my 2 cents. DBXUS does pay dividends but it is barely anything. I would still rather invest in that than in anything related to debt. Don't like debt. Won't invest in an ETN just on principle.
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jonb

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Re: BNPUSA tracking better than DBXUS
« Reply #8 on: February 03, 2016, 06:07:27 pm »
Quote from: Fawkes85 on February 03, 2016, 05:49:21 pm
Just thought I would add my 2 cents. DBXUS does pay dividends but it is barely anything. I would still rather invest in that than in anything related to debt. Don't like debt. Won't invest in an ETN just on principle.

@Fawkes .. am i missing something ? Why would BNPUSA be investing in debt ?? I thought it was similar to any US index track but simply a smart beta with some tweaking ?

And if one had easy access would you just rather go direct into VOO ? I only like the ZAR based etf/n's as you get the currency benefit but your cash is here so if things swing its easier to pull out
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jonb

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Re: BNPUSA tracking better than DBXUS
« Reply #9 on: February 03, 2016, 06:08:56 pm »
@Fawkes

ok my bad, read up on google and now have a better idea of ETN/debt

appreciate it as always
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Fawkes85

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Re: BNPUSA tracking better than DBXUS
« Reply #10 on: February 03, 2016, 06:11:16 pm »
Quote from: jonb on February 03, 2016, 06:07:27 pm
@Fawkes .. am i missing something ? Why would BNPUSA be investing in debt ?? I thought it was similar to any US index track but simply a smart beta with some tweaking ?

And if one had easy access would you just rather go direct into VOO ? I only like the ZAR based etf/n's as you get the currency benefit but your cash is here so if things swing its easier to pull out

As Nivek posted, an ETN is an unsecured debt note issued by an institution. So by investing in BNPUSA you are essentially investing in debt.
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Orca

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Re: BNPUSA tracking better than DBXUS
« Reply #11 on: February 03, 2016, 06:53:02 pm »
Quote from: jonb on February 03, 2016, 05:25:52 pm
Quote from: Orca on February 03, 2016, 05:23:03 pm
DBXUS pays dividends. BNPUSA does not. Also, the latter you will have to buy off market as it is not liquid at all.
'

@Orca

Could you explain off market? and the liquid comment?

Liquidity is the amount of trades per day and the amount of shares traded. Today, BNPUSA only had 2 trades and 1 robot trade at close. Total amount traded was +- R10k.
If you want a large amount of say R500K, it would take weeks to fill and virtually impossible to sell.
You can then buy directly from the bank concerned and not off the JSE directly. This is "off market".

Dividends are normally not automatically re invested for you so the charts will not reflect dividends. Over a 3 year period even a divi of 2% pa re invested will have an impact on the gains. So I strongly doubt  that one is better than the other over time.
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Hamster

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Re: BNPUSA tracking better than DBXUS
« Reply #12 on: February 03, 2016, 09:31:14 pm »
Quote from: jonb on February 03, 2016, 05:23:10 pm
This made me think then of any SA ETN's which are backed by SA banks ( ABSA? ) a downgrade could be a bit negative!
NEWUSD, NEWEUR are ETNs by ABSA. They track the USD/EUR vs RAND exchange rate. Cheap way of hedging against the Rand falling in value. Not very profitable (at sll?) in the long run imo.


EDIT: http://www.etfsa.co.za/ETN_factsheet.htm

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« Last Edit: February 03, 2016, 09:42:09 pm by Hamster »
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