ETF Inflows & Outflows
Performance Leaders & Laggards
Source: ETF Action; flows and performance data as of 5/9/24; performance data excludes leveraged and inverse products
Weekly ETF Reads
Court decision could be only way US spot ether ETFs see light of day by Ben Strack
“The advent of bitcoin ETFs came only after a legal victory over the Securities and Exchange Commission.”
(Note: On last week’s ETF Prime, I was joined by Matthew Sigel, VanEck’s Head of Digital Assets Research, and Rich Kerr, Partner at the global law firm K&L Gates. Both offered their unique perspective on the prospects for spot ether ETF approval.)
A Deep Dive Into Active Equity ETFs by Stephen Welch
“All things equal, if a fund company offers a cheaper ETF clone of a traditional active mutual fund, investors are better off in the ETF.”
Wall Street Has Culled Some 1,000 Mutual Funds in Past Decade by Katie Greifeld
“Mutual funds are being extinguished at a faster pace than new launches as trillions of dollars continue to drain from the products in favor of exchange-traded vehicles.”
Are CEF to ETF Conversions the Latest Trend? by Todd Rosenbluth
“As an increasing amount of mutual funds, SMAs, and closed-end funds convert to the ETF wrapper, the benefits of ETFs remain clear.”
TCW converts 2 mutual funds – including an AI offering – into ETFs by Kathie O’Donnell
“The conversions underscore TCW’s ongoing commitment to bolstering its ETF platform.”
Investors wary of US cannabis ETFs despite recent rally by Suzanne McGee
“Of the nine cannabis-focused ETFs in the U.S. market, only two – the AdvisorShares MSOS 2x Daily ETF and the AdvisorShares Pure US Cannabis ETF – have seen any inflows since the Justice Department’s announcement.”
ETF Lessons for a New Era by Cinthia Murphy
“As long as ETFs stay true to their original mindset of solving investor problems, growth is the only path forward.”
ETF Tweet of the Week
CLO ETFs have been something of a revelation in 2024. The Janus Henderson AAA CLO ETF (JAAA) is in the top 20 of *all* ETF inflows this year (with nearly $4bil!) and has cracked the top 10 over the past month. Several other CLO ETFs have eclipsed $100mil in inflows this year, including the Janus Henderson B-BBB CLO ETF (JBBB), BlackRock AAA CLO ETF (CLOA), and Panagram BBB-B CLO ETF (CLOZ).
There are numerous reasons why CLO ETFs are resonating including the floating rate nature of the underlying assets and their historically higher yield when compared to similarly rated corporate bonds. CLO ETFs can also offer potential diversification benefits in a portfolio. etf.com offers a nice primer on the category this week (here) and I would be remiss if I didn’t highlight my recent conversation with Panagram CEO John Kim.
$JAAA (CLO ETF) is feeling it, just broke record for daily inflows with $324m, aum now $8.8b. Flow chart is poster child for grassroots hit: steady but increasing non-uniform looking lines. Not too shocked given this thing is up 8% past yr with near zero volatility. Sharpe = 6.3 pic.twitter.com/naTHgYN6kk
— Eric Balchunas (@EricBalchunas) May 6, 2024
ETF Chart of the Week
After 78 consecutive trading days of outflows, the Grayscale Bitcoin Trust (GBTC) FINALLY took in new money ($63mil) on May 3rd. GBTC followed that up this past week with another day of inflows ($4mil) and a day with zero inflows or outflows. My thoughts on GBTC snapping the now infamous streak? Here’s what I told Blockworks’ Ben Strack:
“It’s difficult to discern what might be behind the flows into GBTC. ETF buyers are an extremely diverse group with varying motivations. That said, I would be surprised if the inflows become a trend.”
Why don’t I believe inflows will become a trend? GBTC’s 1.5% fee, which is simply way too high to compete in the ETF Terrordome. While GBTC does have the largest AUM and plenty of liquidity, several spot bitcoin ETF competitors are quickly closing the gap:
“While GBTC can still hang its hat on ample liquidity and tight spreads, there are now competing products which can boast the same.”
Source: @HODL15Capital
Source: Morningstar
CNBC ETF Edge
I had the pleasure of joining CNBC’s Bob Pisani on ETF Edge this past week. Astoria’s John Davi, Horizon Kinetics’ James Davolos, and I discussed growth/tech ETFs, ARK ETFs, the quality factor, inflation ETFs, the Fed, & more. You can also catch my quick hit on CNBC’s Halftime Report here.
