ETF Inflows & Outflows


Performance Leaders & Laggards

Source: ETF Action; flows and performance data as of 11/21/24; performance data excludes leveraged and inverse products
Weekly ETF Reads
Can Leveraged ETFs Benefit Your Portfolio? by Lan Anh Tran
“Volatility drag hurts all investments, but the leveraged nature of these ETFs amplifies the problem and makes their losses exponentially harder to beat.”
As SPDR gold ETF marks 20 years, investors up gold allocations by Kathie O’Donnell
“Considering the complexities involved in owning the precious metal via futures, mining stocks, or other vehicles, GLD revolutionized gold ownership by giving the metal a ticker.”
Like the ETF? Check Out the Cheaper Clone by Kim Clark
“The logic is that cannibalizing one’s own product is preferable to losing share to a competitor.”
Ron Baron’s $45 Billion Firm ‘Studying’ Whether to Launch ETFs by Katie Greifeld and Denitsa Tsekova
“Several newcomers have filed for debut ETFs over the past few months, including Bridgewater Associates and Apollo Global Management Inc., after the vehicles’ low fees, tax advantages and liquidity drew trillions away from mutual funds over the past decade.”
Some more Bridgewater ETF thoughts by Robin Wigglesworth
“The ETF structure has long since transcended its roots as a vehicle for passive, plain-vanilla US stock market exposure.”
‘Woke’ Goes Broke: Do ESG Funds Finally Face Extinction? by Matt Krantz
“ESG is so akin to financial kryptonite that some ETFs are purging the letters from their names.”
Spot Bitcoin ETF options trading goes live: What traders need to know by Jason Shubnell
“With the approval of options on Bitcoin ETFs, we’re not just seeing the maturation of the crypto ETF market — we’re watching Bitcoin cement its place alongside stocks, bonds, and commodities as a mainstream institutional investment.”
MSTU’s Bitcoin Leverage Spikes 900% in Two Months by Jeff Benjamin
“When you launch an ETF, you work toward a launch date and through some combination of skill and luck, we happened to launch on the same day the Fed cut interest rates by 50 basis points.”
Booming MicroStrategy ETFs Are Straining Limits at Prime Brokers by Vildana Hajric
“Has the ETF jumped the shark?”
ETF Tweet of the Week
Gary Gensler announced this week that he will be stepping down as SEC Chairman. Gensler became a household name in the ETF space with a combative approach towards spot bitcoin ETFs, the first of which was filed by the Winklevoss twins in July of 2013. Ten-plus years and one lawsuit later, spot bitcoin ETFs finally launched this past January and recently crossed over $100 billion(!) in assets. Interestingly, the SEC press release for Gensler’s departure noted the following:
“In the last full fiscal year, according to the SEC’s Office of the Inspector General, 18 percent of the SEC’s tips, complaints, and referrals were crypto-related, despite the crypto markets comprising less than 1 percent of the U.S. capital markets. Court after court agreed with the Commission’s actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered—whatever their form.“
The D.C. Circuit Court of Appeals actually didn’t agree with the SEC’s actions to “protect investors” from spot bitcoin ETFs:
“The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.”
But I digress. Time to move on…
On January 20, 2025 I will be stepping down as @SECGov Chair.
— Gary Gensler (@GaryGensler) November 21, 2024
A thread 🧵⬇️
ETF Chart of the Week
With fund companies currently announcing capital gains distributions, it’s the perfect time to once again highlight the tax efficiency of ETFs versus mutual funds – particularly for actively managed products. Morningstar’s Stephen Welch:
“Since 2017, no more than 25% of the active ETF universe has distributed capital gains in a given calendar year. Even then, their distributions were relatively small, averaging 1.2% to 3.8% of the net asset value. In 2023, for example, just 51 of 1,235 active ETFs (4.0%) paid a capital gain, with an average distribution of 1.9%. That paled in comparison to the mutual fund universe. Of the 6,710 US-domiciled mutual funds, 34.0% distributed a capital gain in 2023, with an average payout of 3.6%. Even some relatively short-lived mutual funds—which, like recently launched ETFs, might not have had much reason to distribute embedded gains—have had payouts. Of the roughly 1,250 US-domiciled mutual funds launched since 2017, 27% paid a capital gain in 2023.”
Or as VettaFi’s Todd Rosenbluth states more succinctly with the holiday season approaching:
“We expect the vast majority of ETFs to have no such gifts for shareholders. In contrast, many mutual funds will be sending an unwelcome present to their investors.”