tag:blogger.com,1999:blog-1610137678303673471.post4505077112901684231..comments2023-11-02T08:49:23.436-07:00Comments on Sensible Investments: Mr. Hougan Needs to Read His Own Sister PublicationLawrence Weinmanhttp://www.blogger.com/profile/09432369616939155156noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1610137678303673471.post-2090855868573588832010-03-04T10:26:16.776-08:002010-03-04T10:26:16.776-08:00The situation is a bit more nuanced. Each ETF is ...The situation is a bit more nuanced. Each ETF is hedged differently and this is reflected in bid-ask spreads. For IWM, the cash basket is not the primary hedge. Usually the Russell 2k future is used or sometimes it is spread off in another large, liquid future. This is generally the case when you see tight spreads. However, once you have an ETF that is hedged using cash baskets or an illiquid future, there is a matching increase in bid-ask spread (as is seen in many international ETFs). The main point of this discussion however is to understand what you own. Each product has different methods of construction and thus different ways that they can deviate from their intended purpose/index. Not all products with the same name or index are created equally or even similarly. These issues matter very much.supertrooper2002https://www.blogger.com/profile/00891207229788313706noreply@blogger.com