ETF Inflows & Outflows
Performance Leaders & Laggards
Source: ETF Action; flows and performance data as of 2/15/24; performance data excludes leveraged and inverse products
Weekly ETF Reads
Bitcoin, AI and Magnificent 7: The emerging ETF trends as industry gathers for big conference by Bob Pisani
“The industry has proven very skilled at capturing whatever investing zeitgeist is in the air.”
(Note: The “Exchange” conference was the focal point of the ETF industry this past week. Bob Pisani does an excellent job of previewing the event in the above article. I had an opportunity to recap the conference via a live recording of ETF Prime from Miami with three excellent guests: ETF Think Tank’s Cinthia Murphy, Bloomberg’s Eric Balchunas, and VettaFi’s Todd Rosenbluth. We touch on some of the key themes noted by Bob, along with several other observations. You can listen to our recap here.)
Alternatives ETFs still waiting for their big moment with institutions by Ari Weinberg
“To get to the liquidity required for an ETF product, what is being stripped out?”
A Closer Look at Vanguard’s Newest Core Bond ETFs by Daniel Sotiroff
“Vanguard isn’t swinging for the fences when it comes to index-relative performance.”
Are advisors missing the opportunity in active fixed-income ETFs? by Leo Almazora
“Only 12% of fixed-income ETF assets are active, compared to 78% of fixed income mutual fund assets.”
US investors in emerging markets switch to ETFs that exclude China by Sun Yu
“Its divergence from other emerging markets has prompted more investors to consider EM ETFs, which limit exposure to China or cut it altogether.”
A Fund With a 94.9% Yield? You Guessed It, There’s a Catch by Jason Zweig
“People should realize that something at a 70% yield should be riskier than something at 5%. That should be Investing 101.”
Black-Swan ETFs Are Facing Their Own Doomsday After a 99% Plunge by Denitsa Tsekova
“Exchange-traded funds set up to profit from a Wall Street doomsday are facing their own sort of apocalypse.”
(Note: VettaFi’s Lara Crigger & I will be doing a full deep dive into what happened to the Simplify Tail Risk Strategy ETF (CYA) on next week’s ETF Prime.)
Spot Bitcoin ETFs’ Trading Debut in 6 Charts by Bryan Armour
“The liquidity ecosystem for bitcoin ETFs operated extremely well for the new ETFs.”
Another bitcoin ETF just joined the $1B assets club. Will it be the last? by Ben Strack
“Five US spot bitcoin ETFs now have at least $1 billion in assets, while the other half of the field currently lags behind considerably.”
Crypto world, Wall Street await potential spring approval of spot ether ETF by Eleanor Terrett
“I don’t think Chair Gensler is going to have much of a choice.”
ETF Tweet of the Week
I don’t typically make a habit of highlighting my own tweets, but I thought some readers might appreciate reading my five key takeaways from Exchange (click tweet to read entire thread).
Top 5 takeaways so far from @exchangeETF…
— Nate Geraci (@NateGeraci) February 13, 2024
1) ETF multi-share class structure is on *every* major fund company’s mind. Could be huge catalyst for industry growth. That said, prevailing thought is approval of structure hinges on SEC pushing through swing pricing proposal.
ETF Chart of the Week
Are ESG ETFs dead? While that might be a bit premature, the category has clearly lost steam (most of which was media driven anyways). Bloomberg’s Shaheen Contractor:
“ESG ETF launches will likely keep slowing as political turmoil and changing regulations cause asset managers to pause.”
Rightly or wrongly, ESG became intertwined with politics. A golden rule for investors and advisors is to never mix politics with portfolios. You can see the dilemma this creates for ESG ETFs. As Andy Martin, President of 7Twelve Advisors, told ETF.com’s Jeff Benjamin:
“People aren’t just tired of ESG, they’re running from it.”
While there are certainly other reasons for ESG ETFs’ significant challenges (regulatory changes noted by Shaheen above, higher fees, lack of differentiation compared to underlying benchmarks, etc), my sense is that many investors (and people in general) are simply fatigued on political polarization. The lack of interest in ESG ETFs is a reflection of that.
Source: Bloomberg’s Isabelle Lee
