My favorite ETF reads over the past week, along with my ETF tweet and chart of the week!
“Frankly, when we started this conversation in November 2020, we sat around that same question. Is it too early for a Metaverse ETF?”
“Every single ETF with the word ‘inflation’ in either its name or description has posted inflows so far this year.”
“Buffer ETFs have advantages relative to index annuities, including lower costs, reduced risks, and ease of use.”
“I think there is literally zero chance of passage in the next three years.”
“There are over 30m shares shorted right now, so going into this we knew there was a demand.”
“There certainly are meaningful differences between S&P 500 funds.”
ETF Tweet of the Week: Tax efficiency is a highly touted feature of the ETF structure. However, there are nuances to the potential benefits afforded by ETFs, which are nicely articulated in this thread (click tweet to read entire thread)…
As we enter MF cap gains distribution season… let’s talk tax efficiency of ETFs.
It’s real for equities, but often overstated (and outright false for bond ETFs).
The chart below shows the tax impact to returns pre-liquidation and post-liquidation over the past 10 years. 1/4 pic.twitter.com/uYU0ar2Q5G
— Jake (@EconomPic) November 9, 2021
ETF Chart of the Week: Since the beginning of 2020, Vanguard has seen $302 billion flow into their ETFs, while $349 billion has come out of their mutual funds (thus Vanguard’s equity funds have experienced net negative flows overall – a topic for another time, which includes a discussion around demographics and portfolio rebalancing). There are several broader trends in play here including a shift from active to passive, high cost to low cost, and now even low cost index mutual funds to low cost index ETFs. Bloomberg’s James Seyffart explains the trends here (highly recommend reading).
Source: Bloomberg’s James Seyffart