{"id":1932,"date":"2021-07-12T10:43:46","date_gmt":"2021-07-12T10:43:46","guid":{"rendered":"https:\/\/investwithanedge.com\/?page_id=1932"},"modified":"2022-01-11T11:19:24","modified_gmt":"2022-01-11T11:19:24","slug":"rbs-enters-etn-arena-with-timed-s-500","status":"publish","type":"page","link":"https:\/\/investwithanedge.com\/rbs-enters-etn-arena-with-timed-sp-500\/","title":{"rendered":"RBS Enters ETN Arena With Timed S&P; 500"},"content":{"rendered":"
A new ETN sponsor entered the US market December 8, 2010 with a security designed to track the S&P 500 Total Return Index \u201ctimed\u201d with a 200-day moving average. RBS US Large Cap Trendpilot ETN (TRND)<\/strong> are exchange-traded notes issued by The Royal Bank of Scotland, more commonly known as RBS.<\/p>\n The timing methodology employed by TRND is to track the S&P Total Return Index (the \u201cIndex\u201d) when it has been above its 200-day moving average for five consecutive days and to track the return of 3-month Treasury Bills when the Index has been below its 200-day moving average for five consecutive days. A more complete description of the methodology is located in the TRND fact Sheet (pdf).<\/p>\n TRND has a unique variable investor fee (expense ratio) of 1.00% while it is tracking the Index and 0.50% while it is tracking T-Bills. I\u2019m sure many readers are now screaming that the fee is much too high for a simple strategy they could implement themselves. Before you jump to that conclusion, keep in mind that a Do-It-Yourself implementation in a taxable account will incur a tax liability every time a switch between the Index and T-Bills occurs and for every dividend payment received.<\/p>\n Using TRND to implement the strategy should provide extremely tax-efficient returns as it pays no dividends and you incur a tax liability only when you ultimately sell. The downside is that since TRND is an exchange-traded note (ETN) it is an unsecured debt obligation<\/a> of RBS.<\/p>\n