Thu04242014

News

Paws-itively  ready for  disaster

Paws-itively ready for disaster


Dozens of local residents participated in the Pet Ready! program, which included first-aid tips for animals from Adobe Animal Hospital veterinarian Dr. Cristi Blackwolf, above right. Girl Scouts Rachel Torgunrud, above left, in purple of Sunnyv...

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Schools

Local students earn honors at Tech Challenge

Local students earn honors at Tech Challenge


Courtesy of Ann Hepenstal
Gardner Bullis School’s Tech Challenge Team “Fantastic V,” above, recently showed their project at the school’s STEM Expo. Teammates, from left, Brandon Son, Will Hooper, George Weale, Tripp Crissma...

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Community

Merchants, maypoles, music: Farmers' Market season launches May 1

Merchants, maypoles, music: Farmers' Market season launches May 1


Town Crier File Photo
Visitors examine the fresh produce on display at last year’s Downtown Los Altos Farmers’ Market.

It wouldn’t be spring without the return of the Downtown Los Altos Farmers’ Market May 1. The Los Altos Village Association sp...

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Sports

LA tops MV behind Beutter's big day

LA tops MV behind Beutter's big day


Ellie Van Houtte/Town Crier
Los Altos High pitcher Lizzie Beutter went the distance to earn the win against Mountain View.

The number of Los Altos High hits and Mountain View High errors may be in dispute, but there’s no debating which softball ...

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Comment

Enlightened California: No Shoes, Please

I recently read a newspaper article about the newly adopted sex-education curriculum in the state of Mississippi. In the city of Oxford, the following exercise is included: Students pass around a Peppermint Patty chocolate and observe how spoiled it ...

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Business

Cobblery makes short move next door: Longtime business relocating to State Street in May

Cobblery makes short move next door: Longtime business relocating to State Street in May


Ellie Van Houtte/Town Crier
European Cobblery owner Paul Roth is relocating his business from 201 First St., above, to 385 State St. in May.

The European Cobblery, a family-owned and -operated shoe store, is relocating to a new home just a f...

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Books

Local Author Spotlight

In an effort to support authors from Los Altos, Los Altos Hills and Mountain View, many self-published, Book Buzz periodically spotlights their books and offers information on where to purchase them. Local authors are encouraged to submit brief summa...

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People

'Champions for Youth' announced

Challenge Team will honor Mountain View Police Chief Scott Vermeer as “Champion for Youth” at the nonprofit organization’s annual fundraising breakfast, scheduled 7 a.m. May 7 at Michaels at Shoreline, 2960 N. Shoreline Blvd., Mountain View.

Lauren ...

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Stepping Out

Last go-round for 'Hound'

Last go-round for 'Hound'


Tracy Martin/Special to the Town Crier
The actors in “The Hound of the Baskervilles” – from left, Darren Bridgett, Ron Campbell and Michael Gene Sullivan – take on dozens of roles.

TheatreWorks is slated to present “The Hound of the Baskervilles...

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Spiritual Life

Magazine

A yoga class a day keeps the stress away

A yoga class a day keeps the stress away


Van Houtte/Town Crier Yoga of Los Altos hosts a variety of classes, including Strong Flow Vinyasa, above, taught by Doron Hanoch. Yin Yoga instructor Janya Wongsopa guides a student in the practice, below.

It’s nearly 9 a.m. on a Monday mornin...

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The choice between mutual funds and ETFs


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

In part one of my series, I explained the difference between mutual funds and exchange-traded funds (ETFs). The question remains: Which makes a better investment?

Craig Israelsen, associate professor at Utah Valley University, recently attempted to quantify the performance difference between mutual funds and ETFs by creating two portfolios: one using only ETFs, the other containing only mutual funds.

Each portfolio comprised 12 asset classes: large-cap U.S. stocks, mid-cap U.S. stocks, small-cap value U.S. stocks, non-U.S. developed market stocks, non-U.S. emerging market stocks, real estate, natural resources, commodities, U.S. bonds, U.S. inflation-protected bonds, non-U.S. bonds and cash.

Each asset class was weighted equally at 8.33 percent of the total portfolio, and each portfolio was rebalanced at the end of each year over a three-year period.

To make the comparison as objective as possible, Israelsen selected the largest ETF and the largest fund (in terms of total assets) to represent each of the above asset classes in the two portfolios. He did not attempt to identify the best-performing ETF or mutual fund. The returns as measured were net of expense ratios, and there was no attempt to take into account taxes, trading costs or inflation. All data came from Lipper Mutual Fund information.

The results appear on the accompanying chart. Although the ETF portfolio reported slightly higher tax efficiency and a considerably lower aggregate expense ratio (0.22 percent versus 0.63 percent), the two portfolios produced nearly identical returns in the three years from 2010 through 2012 (8.13 percent average annual return for the ETF portfolio and 8.23 percent for the mutual fund portfolio).

Of course, this analysis only covered a three-year period, a very small sample from which to infer longer-term investment performance. And there was a pretty big disparity in some of the individual asset classes, in particular international fixed income, where the mutual funds trounced the ETFs, and in natural resources, where the reverse occurred.

Nonetheless, my conclusion from this analysis is that it’s more important to focus on building a well-diversified portfolio than trying to find the “best” mutual fund or ETF. Other studies have borne this out as well.

Israelsen also discovered that the performance spread among ETFs within each asset class tended to be smaller than that of the mutual funds. This, of course, can be attributed to the fact that most ETFs are index trackers, whereas many mutual funds are actively managed and have much more flexibility.

As to which is better, mutual funds or ETFs, the answer would appear to be neither, as long as you use a sufficient number of asset classes and an appropriate asset allocation model for your investment portfolio.

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. .

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