Tue08192014

News

Candidates finalized for schools, councils

Candidates finalized for schools, councils


Election season is officially in full swing, as eligible candidates for various city council and school district seats met Friday’s filing deadline set by the Santa Clara County Registrar of Voters.

Read more:

Loading...

Schools

Local tutoring center earns kudos in parent magazine's reader poll

Local tutoring center earns kudos in parent magazine's reader poll


Courtesy of Kobad Bugwadia
Mathnasium’s fourth-grade participants, from left, Jenna Haynie, Maelle Allanic, Tanish Gupta, Hamza Raza and David Chan, join instructors to celebrate their achievements in the tutoring center’s national TriMathlon this ...

Read more:

Loading...

Community

Back to School: Tips, kits and a poem

Back to School: Tips, kits and a poem

Los Altos teachers are readying their rooms this week for the coming onslaught of students, and parents are digging back out lunch boxes and pencil cases (do we still use those?) And here in the newsroom, Town Crier writers offered a slate of back-to...

Read more:

Loading...

Sports

Tyler Johnson: From hills to Heat

Tyler Johnson: From hills to Heat


Courtesy of NBAE/Getty Images
Shooting guard Tyler Johnson, a St. Francis High graduate from Mountain View, signed with the Miami Heat last week.

Signed by the Miami Heat as an undrafted free agent last week, rookie Tyler Johnson faces an uphill ba...

Read more:

Loading...

Comment

Really, why the, eh, consolidation?

The recent merger (consolidation?) of the newly formed Friends of Los Altos (FOLA) and the 14-year-old civic organization Los Altos Neighborhood Network (LANN) left us puzzled.

A July 28 press release, which did not state plainly that the merger fol...

Read more:

Loading...

Special Sections

Globetrotting – one glass at a time

Globetrotting – one glass at a time


Christine Moore/Special to the Town Crier
Take a tour of the world from your own picnic table with a selection of regional wines, above. Argentina’s white wines, left, pair well with a choriza pizza (see recipe on page 35).

I’m taking a...

Read more:

Loading...

Business

Torrey Pines Bank names regional president

Torrey Pines Bank names regional president


Ellie Van Houtte/Town Crier
Torrey Pines Bank recently named Fred Voss its regional president for the Bay Area. The bank has branches at 20 First St. in Los Altos, above, and in Oakland and Southern California.

Torrey Pines Bank last week appointed ...

Read more:

Loading...

Books

People

SHERRY DYCE BARBA

SHERRY DYCE BARBA

Sherry Dyce Barba, dear wife of Peter Barba, and a longtime resident of Los Altos, passed away peacefully on July 27, 2014, at The Forum, in Cupertino. She was surrounded by loving family members and visited continuously in her last weeks by a legi...

Read more:

Loading...

Travel

Bergama bound: A visit to newest World Heritage site

Bergama bound: A visit to newest World Heritage site


Photo Eren GÖknar/ Special to the Town Crier
The amphitheater in Turkey’s ancient city of Pergamon, now known as Bergama, overlooks the Bakirçay River valley, left. The city’s ruins also include the Temple of Trajan.

It was 90 F during t...

Read more:

Loading...

Stepping Out

No ‘Water’ shortage in Mtn. View


Kevin Berne/Special to the Town Crier
Elliot (Miles Gaston Villanueva) struggles to understand Odessa’s (Zilah Mendoza) online activity in TheatreWorks’ regional premiere of the Pulitzer Prize-winning drama “Water by the Spoonful....

Read more:

Loading...

Spiritual Life

Spiritual Briefs

Meditation group meets at Foothills Congregational

A Weekly Meditation Practice group meets 7-8:15 a.m. Tuesdays at Foothills Congregational Church, 461 Orange Ave., Los Altos.

Read more:

Loading...

Magazine

Festival features fun for everyone

Festival features fun for everyone


TOWN CRIER FILE PHOTO
The Los Altos Arts & Wine Festival boasts more than 375 craft and arts booths.

This weekend’s 35th annual Los Altos Arts & Wine Festival promises to be jam-packed with fun activities for just about everyone. The eve...

Read more:

Loading...

Examining the choice between mutual funds and ETFs

Following is the first in a two-part series on mutual and exchange-traded funds.

You’re probably familiar with mutual funds. They are arguably the most common type of investment choice for 401(k) and other retirement accounts.

Exchange-traded funds (ETFs), by contrast, have only been around since the early 1990s and have yet to find their way onto many retirement plan menus. But they are widely available for brokerage accounts and since 2008 have experienced explosive growth. You may be wondering what the difference is between the two types of funds and which makes a better investment.

ETFs, like traditional mutual funds, represent a basket of assets such as stocks or bonds. Unlike mutual funds, investors cannot buy ETF shares directly from the investment companies that offer them. Instead, investors must buy ETFs from other investors, just like stocks. That has two implications: (1) You can buy ETFs anytime during the trading day, unlike mutual funds, which can only be purchased at the end of the day after their net asset values have been calculated, and (2) during periods of high demand, the prices of ETFs can exceed the net asset value of their underlying assets.

Because buyers generally do not want to pay more than an ETF is worth, something is needed to keep the price close to the ETF’s net asset value. The solution is to allow certain financial institutions, known as authorized participants, the ability to purchase and redeem blocks of ETF shares, called creation units, directly from the ETF company. This approach gives ETFs an arbitrage mechanism that tends to minimize the potential deviation between the market price and the net asset value of the ETF’s shares.

If there is strong investor demand for an ETF, its share price will (temporarily) rise above its net asset value per share, giving authorized participants an incentive to purchase additional creation units from the ETF and sell the component ETF shares in the open market. The additional supply of ETF shares reduces the market price per share, generally eliminating the premium over net asset value. A similar process applies when there is weak demand for an ETF, and its shares trade at a discount from net asset value.

Creation-unit purchases and redemptions are in kind – meaning that the underlying assets are traded back and forth rather than bought and sold – allowing the authorized participants to swap out low-basis shares for high-basis shares without having to pay tax. As a result, ETF proponents argue that ETFs are more tax efficient than mutual funds, which cannot be traded like that.

Another professed benefit of ETFs is the lower expense ratio – the annual costs fund holders have to pay to the fund companies – compared with mutual funds. While true in the aggregate, this is really due to the fact that the majority of ETFs are passively managed and based on indices created and updated by various other financial institutions. There are numerous examples of mutual funds in certain asset classes that are less expensive than their ETF counterparts.

Craig Israelsen, associate professor at Utah Valley University, recently attempted to quantify the performance difference between mutual funds and ETFs. In part 2 of the series, I’ll share his findings.

Los Altos resident Artie Green is a Certified Financial Planner and principal at Cognizant Wealth Advisors. For more information, call 209-4062 or email This email address is being protected from spambots. You need JavaScript enabled to view it. .

Schools »

Schools
Read More

Sports »

sports
Read More

People »

people
Read More

Special Sections »

Special Sections
Read More

Photos of Los Altos

photoshelter
Browse and buy photos