Toronto-based adviser taking advantage of rally to sell high-flying stocks and buy more of his favorite bond ETFs and DFA funds.

 

Mike Bayer considers himself a contrarian investor.

In the past few months, as stock markets soared, that sort of go-against-the-grain approach has taken center stage.

The Toronto, Canada-based adviser and president of Strategic Analysis Capital Management says he prefers to buy exchange-traded funds and mutual funds from Dimensional Fund Advisors when they’re out of favor.

“The problem most investors have is that they tend to trade too frequently and make changes in the wrong direction. They’re buying high and selling low,” said Bayer, who works with individual and institutional clients in Canada and the United States.

Since early March, SACM has been taking advantage of the rally in stocks to rebalance client portfolios. Bayer has been trimming positions in the Vanguard Emerging Markets Stock ETF (NYSE: VWO).

“Emerging markets have had a big run-up in

...

Vanguard's CIO doesn't see equities as any less appealing these days, and warns investors not to get too carried away with exotic asset classes.

 

Gus Sauter is Vanguard Group's chief investment officer. He started at the funds giant in October 1987, two weeks before global markets crashed.

In that environment, Sauter took over as head of Vanguard's quantitative equities group, which at the time consisted of only index mutual funds. Since then, the unit has expanded to include a combination of passive and active quantitative strategies. Six years ago, Sauter assumed the company's CIO duties as well.

On Wednesday, IndexUniverse.com's Managing Editor Murray Coleman caught up with the busy Vanguard executive to discuss current market conditions and trends he's watching such as the upcoming launch of the Vanguard FTSE All-World ex-US Small-Cap Index Fund.

 

IU: Is buy-and-hold investing dead?

Sauter: No, I don't think it is. In fact, it's as prudent today

...

Whipsawed by increasing market volatility, third-quarter results for blue chip ETFs in similar style categories thrown all over the map.

 

As investors prepare for a final three-month push to raise dour 2008 returns, third-quarter trends point to lower markets at least in the near-term.

But much hinges on a $700 billion bailout package for some of the world's biggest banks and financial services firms. And even if that passes both chambers of Congress, economists aren't expecting the ongoing global credit crisis to end right away.

The performance of the most liquid blue chip stocks in the U.S. under such choppy waters is likely to undergo increased scrutiny. Perhaps the most transparent way to monitor the large-cap universe as a group is through exchange-traded funds.

Below is a Q3 review by IndexUniverse of that category by investment style using Morningstar Inc. data.

Large Value

Ticker

Q3 (%)

IVE

-4.86

IWD

-6.15

VTV

-6.31

PRF

-6.38

DLN

-2.50

After a rough

...

With the help of its second share class of ETFs, VTSMX tops VFINX in terms of total assets for first time.

 

Ever since it opened, the Vanguard 500 Index Fund (VFINX) has been the flagship for growth at the company started by John Bogle.

But some 32 years after it launched, the granddaddy of index mutual funds has now lost its mantle as the biggest at the indexing fund giant.

At the end of August, the Vanguard Total Stock Market Index Fund (VTSMX) had attracted $107.5 billion in assets. That compares to $107 billion for the legendary VFINX, which tracks the S&P 500 index, according to Vanguard.

The first-ever retail index fund, VFINX was a big ingredient in propelling Vanguard founder and ex-chairman Bogle and his upstart fund shop to the top of the industry. It launched in August of 1976.

The total stock market approach, as championed by VTSMX,

...