My favorite ETF reads over the past week, along with my ETF tweet and chart of the week!
Bond Ladder ETFs Can Help Investors Climb Higher by Saraja Samant
“ETF bond ladders remain a worthy option to consider.”
Diamond Trading Firm Crafts Gemstones Into a Commodity by Ryan Dezember
“An exchange-traded fund is next up in Diamond Standard Inc.’s plans to get the gems included in the indexes that steer commodity fund investments.”
The Bitcoin Futures ETF at 1: $1.8 Billion Lured, Over Half Lost by Vildana Hajric and Katherine Greifeld
“Still. No. Spot. Bitcoin. ETF.”
Five of the worst ETF first-year performances are crypto-related by Steve Johnson
“Crypto exchange traded funds account for five of the worst seven debuts in the history of the ETF industry.”
SEC Votes to Make Funds, ETFs Simplify Their Fee Disclosures by Melanie Waddell
“The agency voted to require mutual funds and ETFs to transmit concise and visually engaging shareholder reports.”
‘Buffer’ ETFs Post 80% Surge In Assets As Haven In Bear Market by Elaine Chen
“I’m willing to give up some of the upside because the downside right now is so much more important to me.”
ETF Tweet of the Week: While the ETF industry’s roots are passive, the majority of its recent blossoms are active. Active ETF launches exceeded passive ETF launches during the past two calendar years and are a shoo-in to repeat the feat in 2022. Why? There are several reasons including the tax efficiency, lower costs, and greater investor accessibility of the ETF wrapper (click tweet to read entire thread).
1/4 – There were 6 new active ETFs listed this week, from Capital Group, T. Rowe Price, New York Life, and Angel Oak.
This brings the # of active ETF launches for the YTD to 212–more than any year save 2021–with two months left in 2022. pic.twitter.com/Vaex91JGEA
— Ben Johnson, CFA (@MstarBenJohnson) October 28, 2022
ETF Chart of the Week: Currency hedged ETFs have shown meaningful outperformance this year as the U.S. dollar has surged. However, unlike from 2013-2015 when investors flocked to products such as the WidsomTree Japan Hedged Equity ETF (DXJ) in an attempt to capture similar outperformance, recent investor interest in the category has been lukewarm at best. While currency hedging can eliminate most of the volatility associated with currency changes and offer an overall smoother ride to investors, the challenge is stomaching the inevitable periods of underperformance depicted in the below chart. Much easier said, than done. Following underperformance that began in mid-2015, investors rushed out of currency hedged ETFs (i.e. DXJ went from nearly $20 billion in assets to $2 billion!). Will investors now return en masse?
Source: Morningstar’s Daniel Sotiroff
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