My favorite ETF reads over the past week, along with my ETF tweet and chart of the week!
Grayscale to Argue SEC’s Inconsistency as Bitcoin ETF Dispute Heads to Court by Jesse Hamilton
“The more you get into the specifics, the stronger our case gets.”
Jim Cramer ETFs Arrive to Bet On, Against Mad Money Host’s Picks by Katie Greifeld
“Tuttle and two colleagues watch Cramer’s television appearances throughout the day and monitor his Twitter account.”
On its 30th birthday, the ETF looms large by Vanguard
“Thirty years after ETFs were launched, their advantages have only become more clear.”
Small ETFs Gaining Traction in 2023 and Investors Plow Into Zero Fee, Natural Gas & Inverse ARK ETFs by Sumit Roy
“The first ‘true’ zero-fee ETF, has gathered $1.3 billion in inflows so far in 2023.”
Preparing for the Sector ETFs Shakeup of 2023 by Todd Rosenbluth
“What’s inside $200 billion of sector ETFs will be undergoing significant changes.”
Morgan Stanley ESG ETFs get the cold shoulder by Jeff Benjamin
“Reality has set in and the honeymoon is over for ESG.”
ETF Tweet of the Week: Bloomberg’s Eric Balchunas offered some pointed comments regarding ESG ETFs (click tweet to read entire thread). All I can say is… yup.
ETF Chart of the Week: Last week, I noted how actively managed ETFs had captured some 35-40% of all ETF inflows so far this year. That’s a staggering percentage given the category only represents around 5-6% of total industry assets. A recent VettaFi survey of advisors helps explain what might be going on. 87% of advisors (who are a big driver of ETF flows) said they were either somewhat or very likely to increase exposure to active ETF strategies. Unlike ESG ETFs where everyone says they want them and nobody actually puts money to work, active ETFs are starting to back up the hype with real assets (yes, I realize some ESG ETFs are active). Why are advisors looking to active ETFs now? The challenging market environment over the past two years is certainly a factor. VettaFi’s Dave Nadig explains what happens in a down market:
“People lose their conviction a little bit. They may have been in an index strategy they just saw themselves take a haircut, maybe now they want somebody minding the store.”
I also like this explanation from CFRA’s Aniket Ullal:
“The growth in active ETFs likely represents a concerted distribution push by firms with the ability to grow ETF assets due to their existing mutual fund or wealth management franchises. It shows that investors that have existing relationships or trust in these firms are willing to migrate their relationship over to these new ETF vehicles.”
Whatever the reason, active ETFs are one of the biggest stories so far this year. VettaFi’s Todd Rosenbluth and I discuss whether active ETF flows are sustainable on this week’s ETF Prime.
