My favorite ETF reads over the past week, along with my ETF tweet and chart of the week!
“Nobody launches specialized or thematic funds at market bottoms. They do so close to (relative) market tops.”
“The events of 2020 highlight just how big and influential the growing bond ETF universe is, and how vitally important firms like Jane Street are to their functioning.”
“ETFs sounding like they provide the same exposure usually do not; buying the cheapest or the largest ETF will not necessarily be the best decision; and investors should not simply choose whichever ETF performed the best over the past year or three.”
“The relatively small nature of this market – and the long-dead specter of inflation generally – has attracted very little TIPS or inflation-related offerings by ETF issuers, but there’s nothing like a hot market to awaken the creative juices among ETF providers.”
“ETF flows have topped mutual fund flows in eight of the past 10 years, but the gap in 2020 was the biggest ever.”
“The in-kind redemption was likely an attempt by investors to get their hands on scarce GameStop shares.”
ETF Tweet of the Week: Much was written on the potential underlying drivers of this week’s “Reddit stock” mania. While there are numerous factors at play, it’s difficult not to consider the impact of brokerages offering commission-free trading in stocks, ETFs, and options.
The elimination of trading fees will go down as a big event. Opened the doors to millions of investors who collectively have a lot of sway.
— Morgan Housel (@morganhousel) January 27, 2021
ETF Chart of the Week: GameStop’s skyrocketing price quickly took the stock’s weight from 1% to 20% in the SPDR S&P Retail ETF (XRT). The ETF uses an equal-weighting methodology, with each stock intended to represent approximately 1% of holdings!
Source: Bloomberg’s James Seyffart