13 lessons
Inside an ETF: Creation & Redemption
Nobody at the ETF ever buys your shares. A hidden arbitrage machine keeps the price honest, here's the loop.
ETF vs Mutual Fund: Two Different Machines Under the Hood
Both hold the same basket of stocks. But one trades all day like a share and quietly avoids capital-gains tax, while the other prices once at 4pm and can hand you a tax bill you never asked for. The difference is the plumbing.
NAV Calculation: the 4pm ritual that prices your fund
Every weekday at 4pm Eastern, the stock market closes and a quiet machine springs to life: it values every holding, subtracts every cost, and stamps a single price on your fund. Trade before the bell and you get tonight’s number, even though you won’t learn it until after you’ve committed.
Tracking the S&P 500: Rebalancing, Sampling & Tracking Error
An S&P 500 fund promises to "just hold the index". But the index changes its mind four times a year, pays dividends on its own schedule, and never charges a fee, so matching it perfectly is harder than it looks.
How a Hedge Fund Actually Charges 2-and-20
The headline says "2-and-20". The reality is a 2% fee you pay even when you lose money, a 20% cut of gains that only counts above a moving line, and an effective rate that has historically swallowed roughly half of the profits.
Private Equity Mechanics: Capital Calls, the J-Curve, and the Carry Waterfall
An LP signs up for $10m but doesn't wire a cent on day one. For three years they only send money and watch their account go red — then the cheques start coming back, and the order they arrive in decides who gets rich.
Venture Capital: Winning When Most Bets Die
Half the companies a VC fund backs lose money. Yet the best funds hand investors 3x. The trick is that one bet can pay for all the corpses, and then some.
The Securitization Assembly Line: From 5,000 Mortgages to a AAA Bond
Take 5,000 subprime mortgages no bank wants on its books. Slice the cash flow into layers, sell the safe layer as AAA, repackage the leftovers — and you have built the machine that broke in 2008.
Money Market Funds: Breaking the Buck
Your "cash" fund holds a steady $1.00 a share, until one Monday in 2008 it didn’t. A money market fund looks like a savings account, but a savings account can’t lose three cents on the dollar and trigger a $40bn run.
Robo-Advisors: After You Answer the Questionnaire
You tick six boxes about your nerves and your timeline, hit "invest", and a £100 deposit lands in eight ETFs by morning. No human looked at it. So what actually happened?
One Fund, Five Price Tags
Pick any big mutual fund and you will find Class A, B, C, I and a "clean" class side by side. Same portfolio, same manager, same holdings — yet a 40-year investor can end up paying double. The difference is not investment skill. It is plumbing for paying the salesperson.
Pension Fund Plumbing: From Payslip to a Payment 40 Years Later
A few pounds vanish from your payslip each month and reappear, decades later, as income you can live on. In between sit your employer, the taxman, a trustee, a fund manager and the entire global stock market.
LDI and the 2022 Gilt Crisis: When Pension Hedging Nearly Broke the Bond Market
A hedge designed to make pensions safer became the thing that nearly blew up the UK bond market. In four days a "boring" pension strategy forced the Bank of England to start buying gilts to stop a doom loop.