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

 

(Note: This past Wednesday, the SEC proposed new standards around fund labeling and disclosures – specifically targeting “ESG” funds.  Commentary around this proposal is featured heavily in this week’s ETF Buzz).

 

SEC Proposes New Rule To Address Greenwashing by Heather Bell

“Concerned about the fuzziness around the terminology and the potential confusion it presents for investors, the proposal mainly addresses environmental, social and governance issues.”

 

SEC Planned Crackdown on ‘Misleading’ Funds Goes Far Beyond ESG by Sam Potter

“Should Apple be in an Electric Vehicles ETF? Should Exxon be in an ESG ETF? It depends on the methodology and they are all different.”

 

What the E? Is Tesla in My ESG ETF? by Todd Rosenbluth

“Let’s all agree to do some homework this week: Look inside any ESG ETF we own or are considering owning.”

 

High-value bond ETF trades rise sharply from last year by Emma Boyde

“ETFs, and therefore the indices on which they are based, are acting as an evolutionary accelerant.”

 

Investors Might Want To Give Bitcoin Futures Another Look by John Hyland

“With lower levels of contango in the market, should investors really view the futures-based ETFs as a poor second choice?”

 

Four Tips for Trading ETFs by Ben Johnson

“It is always a good time to brush up on what constitutes good hygiene when transacting ETFs.”

 

ETF Tweet of the Week:  What exactly is “ESG”?  That’s a question the SEC is attempting to have asset managers answer.  From the SEC’s proposal:

“Requiring comparable, consistent, and reliable information from all funds and advisers that use an ESG label would reduce the risk of exaggerated claims of the role of ESG factors in investing.”

 

ETF Chart of the Week:  6 out of the 10 largest ESG ETFs are trailing the S&P 500 this year.  The potential for underperformance is a primary reason the SEC is proposing to standardize and enhance investor disclosures around ESG funds.  SEC Chair Gary Gensler: 

“When I think about this topic, I’m reminded of walking down the aisle of a grocery store and seeing a product like fat-free milk. What does “fat-free” mean? Well, in that case, you can see objective figures, like grams of fat, which are detailed on the nutrition label. Funds often disclose objective metrics as well. When doing so, investors get a window into the criteria used by the asset managers for the fund and the data that underlies the claim.  When it comes to ESG investing, though, there’s currently a huge range of what asset managers might disclose or mean by their claims.”

Source:  Matt Krantz, Investor’s Business Daily

 

Last Week’s ETF Buzz