New Money

ETFInvestor gambles successfully on the new 3X ETFs.

There's no guns ETF yet, but here's a pair of funds that provide exposure to the defense sector.

No surprise here: The luxury goods ETF is one of the year's worst performers. It's down 58 percent year to date.

ETF Trends says keep an eye on these five ETFs.

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Consuelo Mack, the host of the PBS show "Consuelo Mack WealthTrack" makes a pretty strong case for charging into the market now, while likening it to a shoe sale (the bold is mine):

"When a place like Macy's has a shoe sale, you want to be a buyer at that time. This current market situation is like that Macy's shoe sale: It's the stock-sale of a generation. So keep doing your dividend reinvestment programs, keep on dollar-cost averaging, and keep investing in increments. Two to three years from now, you'll be glad you did or wished you had."

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Some potentially bad news for mutual-fund investors:

"Lipper Senior Analyst Jeff Tjornehoj predicts fund fees could rise 10% next year. Added to that, he warned, service providers are likely to increase their fees, and fund companies, in turn, will simply pass those along to shareholders. Added to that, international funds are in a disadvantaged position, since the dollar has been so strong."

 Seems like it'll become harder and harder for investors to justify such increases when active managers aren't earning their keep. Over the past five years that ended June 30, the S&P 500 beat out roughly 70 percent of actively managed large-company funds, according to S&P. Actively managed international funds and bond funds lagged behind their benchmarks by even more (87 percent and just over 75 percent, respectively.)

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Here's a perfect example of why you shouldn't put too much stake in a fund's recent returns.

According to Morningstar's recent list of best-performing diversified U.S. stock funds (year-to-date), a fund called Embarcadero Alternative Strategies occupies the top spot.

I had never heard of the fund before, so I took a quick look at its profile. It turns out that Embarcadero Funds is the new name of what was previously the Van Wagoner funds, which have a sketchy history (Chuck Jaffe of Marketwatch once put it like this: "Run for the hills.")

So far this year, Embarcadero is down just 1.55 percent, which looks good compared with the losses sustained by most stock funds. But over the past ten years, the Embarcadero has lost more than 12 percent per year, on average, which puts it behind 99 percent of its peers that invest in midsized, fast-growing companies.

Curious about how Embarcadero pulled ahead of the pack, I checked its portfolio breakdown on Morningstar.com. I wasn't surprised to find that roughly 90 percent of the fund is in cash. It actually holds just five stocks, most of which are tech companies I'm not familiar with.

Mystery solved. It isn't hard to beat the competition when most of your money is sitting in the bank.

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