One More Way Retail Investors Get Bent Over

December 4th, 2009 by Mebane Faber

Comments

The below graphic is one reason we launched two private funds over 6 months ago. I couldn’t offer a leveraged version of our tactical system in good conscience with most brokers. The only one that is even remotely reasonable is Interactive Brokers (we don’t use them currently). Criminal!

Graphic from IB’s website:

macclary

The new Barclays ETNs offer leverage for 0.75% plus T-Bills. Opening position is just the share price of course. I think this may prove to be a fairly big deal.
https://ecommerce.barcap.com/investorsolutions/...

Eddie

A warning regarding some dangers of using the Barclays ETN+
http://bit.ly/4N1Pb1

Gregory P

You can get a good overview of the brokers fees and commissions here.
http://finviz.com/store/stock-brokers.ashx

EricC

Interactive Brokers has excellent prime brokerage services. We've used them for our fund since 2005. They are a great brokerage firm with an excellent credit rating and practices. Executions, costs, technology, statements, reports, risk tools, etc. all A+.

Jez Liberty

Eric - thanks for the feedback on IB. Reassures me that I have chosen a retail platform that seems to be scalable for managin large funds (hopefully where I'll be at some point ;-)

thomasanderson

told you

Jez Liberty

This really is shocking - especially given the day and age of free money (ie ~0% interest rate)
Lucky I use IB (well not really lucky - that was a choice based on research) - but I am surprised why you do not use them?
I find them pretty good (at least for all the basic stuff)

WorldBeta

we use JPM and Goldman for leverage. we don't like offering the leveraged funds to retail - i'd much rather them use the global rotation.

Jez Liberty

Fair enough - I should have thought that a big fund like yours (I presume) has access to prime brokers...

And I agree that the global rotation is so good and simple that it is probably great for retail!

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The opinions expressed on this site are those solely of Mebane Faber and do not necessarily represent those of Cambria Investment Management, Inc. (“CIMI”). This website is made available for educational and entertainment purposes only. Mr. Faber is an Investment Adviser Representative of CIMI, an investment adviser registered with the states of California and Utah. This website is for informational purposes only and does not constitute a complete description of the investment services or performance of CIMI. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. A copy of CIMI’s Part II of Form ADV and privacy policy is available upon request. This website is in no way a solicitation or an offer to sell securities or investment advisory services. Mr. Faber and CIMI disclaim responsibility for updating information. In addition, Mr. Faber and CIMI disclaim responsibility for third-party content, including information accessed through hyperlinks. Faber receives affiliate commissions through Amazon and AlphaClone.

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