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My favorite ETF reads over the past week, along with my ETF tweet and chart of the week!

(Note:  The first three articles center on a recent proposal by Finra which could impact the accessibility of “complex” ETFs.  ETF.com’s Dan Mika does an excellent job of explaining the basics.  ETF industry veterans Dave Nadig and Phil Bak dive into the weeds with passionate counterarguments to the proposal.  I consider all three required reading for any ETF industry stakeholder.)

 

Issuers Balk At FINRA ‘Complex’ Proposal by Dan Mika

“The proposal is broadly intended to protect retail investors from ‘complex’ ETFs and mutual funds they may not understand.”

 

FINRAs Complex Product Proposal: Bad Policy by Dave Nadig

“I can’t seem to let go of one minor detail facing the ETF industry – and financial advisors and all other kinds of investors: we’re at a very odd tipping point for financial regulation.”

 

What FINRA calls complexity I call sophistication by Phil Bak

“Regulation is the enemy of innovation.  Financial innovation is a net good.  What you call complexity, I call sophistication.”

 

Most Interesting ETF Launches Of The Year by Sumit Roy

“The number of new ETF launches in the first quarter totaled 107 – 20% more than the 89 ETFs that made their debut in the first quarter of last year.”

 

Takeover of Anti-ARK Fund Is Just a Start as AXS Comes for Niche ETFs by Katie Greifeld

“Our view is, rather than launch the third or fifth product of its kind, we would rather get the earlier movers.”

 

Reframing The Thematic ETF Debate by Jessica Ferringer

“While broad-based passive funds should make up the core of an ETF investor’s portfolio, allocations to thematic ETFs fulfill a different purpose.”

 

Recapping Key Milestones Before Next Week’s Exchange Conference by Todd Rosenbluth

“Let’s look back at some of the key milestones for the ETF industry in the past two-plus years.”

 

ETF Tweet of the Week:  This past Wednesday, the SEC approved the Teucrium Bitcoin Futures ETF.  That’s noteworthy because this product was filed under the Securities Act of 1933 – and not the Investment Company Act of 1940 like existing bitcoin futures ETFs (such as BITO, the ProShares Bitcoin Strategy ETF).  The SEC had previously stated that ’40 Act funds provide additional investor protections.  Grayscale, who is seeking to convert their popular Grayscale Bitcoin Trust (GBTC) into an ETF, has argued that the SEC is in violation of the Administrative Procedure Act (APA).  The APA requires the SEC to treat like situations alike.  Grayscale states:

“Bitcoin ETF products – Bitcoin futures-based ETFs registered under the ‘40 Act and Bitcoin spot-based ETFs registered under the ‘33 Act – are an example of two *like* situations that should be treated *alike*.”

By approving the Teucrium Bitcoin Futures ETF, the SEC just killed one of their reasons for denying a spot bitcoin ETF.  Grayscale’s CEO explains in detail (click tweet to read entire thread)…

 

ETF Chart of the Week:  ETFs took in nearly $200 billion in the first quarter of 2022, despite market volatility and negative returns.  That included $93 billion in March, the third-most ever.  While stock ETFs comprised about 80% of first quarter flows, broad commodity ETFs vacuumed-up record flows of their own on the back of the best quarterly performance from the asset class since 1990.

Source:  State Street’s Matt Bartolini

 

Last Week’s ETF Buzz