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Dave Nadig
3:15
effectively re-skinning the ETF to be able to slice them smaller.
there's always a tail end -- a half share not owner or a half share too much -- but over thousands or millions of customers, it's not impactful.
P. Northfield
3:16
Why does GOEX have such a high yield?
Dave Nadig
3:17
Super narrow question, which I have to partially guess at.  So GOEX is the gold wildcatters fund, if I recall.
Yeah, it's the Global X Gold Explorers ETF.
3:18
So the nature of that business is that you either boom or bust.  THe underlying firms either make a lot of revenue, or they go out of business.
the challenge here (and im just speaking from my basic knowledge of the space, not the specific funds methodology)
3:19
is that you could end up with huge yield, but not necessarily huge total returns.
In other words - do you really want a 20% dividend if the NAV just goes down 20%.  Probably not.
3:20
But this is a case where, because the fund is super heavily concentrated (I'm guessing) in a few names, you could do a little company research to understand what they're distributing, and why.
the narrower the ETF, sadly, the more homework you really have to do.
Mark from Ohio
3:20
Good afternoon, I am a lazy portfolio investor (3 + REIT) and I need 1 core international ETF for my retirement plan. Please provide a few some core options. I do not want 3 or 4 internationals in my account. Thank you!
Dave Nadig
3:20
I love the honesty.
I'm the worlds most boring investor myself.
If you're looking to have a single INTL equity position, chances are what you really need is some verison of "all world minus the U.S."
3:21
so that would include every region, emerging markets, developed markets and so on.
The big-dog in that race is Vanguard's VEU, with competition from iShares IXUS.
You can get fancier (FlexShares has a dividend focused version, for instance), but these would be a good starting point.
3:22
(FYI, you can find these pretty easily with our search tool at etf.com/finder)
But with all these kinds of questions, where you end up with a few big funds, that are clearly diverse, cheap and trade well, I think the question you should always ask is "can I do better?"
its worth looking at the competition and seeing if, for instance, you see a cheaper fund, or a particular take on the exposure that resonates with your worldview, and so on.
3:23
but it's not terrible to start with the established winners and ask that question - the answer may in fact be "nope, there's a reason these folks are the top choices"
Anonymous
3:23
If Vanguard runs funds ‘at cost’ where do they get they money to launch new funds?  Do fund shareholders of existing Vanguard funds subsidize fund costs of a new fund that can’t cover costs while it’s still small?
Dave Nadig
3:23
I think a lot of people misunderstand Vanguard's corporate structure.
3:24
There is in fact a corporate entity - the Vanguard Group - and it's not strictly a non profit.
There are no rules that say "the company cannot accumulate cash." So the management of Vanguard essentially decides based on what their strategic objectives are, how much they have in cash, and what their income looks like, how they want to fund growth.
3:25
It's a "non-profit" in the sense that the motive is different, and there are no third party shareholders to return dividends too -- it's all owned by the funds themselves, and thus the shareholders of those funds.
The way "profit" comes back is through lower and lower fees.
3:26
But they have a huge cash warchest, still pay their people well, and so on.  They can say "we're going to spend $100mm on marketing a new thing". They just don't ALSO have to pay dividends to corporate shareholders or do share buybacks and so on.
Michael T. Kennedy
3:26
Several ETF Providers, including CBOE Vest and Innovator, have submitted filings to bring defined outcome ETFs to the market place. From what I understand, these are essentially structured notes in an ETF wrapper. A few questions. 1) Do you believe the SEC will approve these products? 2) If so, do you see much demand for them? Will they gain assets?
Dave Nadig
3:27
So there are two things going on here.  The real issue that NEEDS to be solved is decumulation.
We're really good, as an industry, at teaching people how to save, and at building products to help them grow their assets.
But we're generally terrible at helping people take a 1 million dollar nest egg and then use it.
3:28
That's what these "defined outcome" products are (sort of) trying to be part of -- the decumulation solution..
I guess the big issue I have is that we already have these products -- they're called annuities.
The hoops that you need to jump through to produce the defined outcome streams without actually involving a risk-taker (an insurance company) are immense.
So the first runs here are (if I recall) simply collared strategies -- you can't lose more than 5%, you cant gain more than 20%, for instance.
3:29
That's totally achievable just through smart options trading.
Do I think there's a real market for it?  Honestly I'm very skeptical.
I think smart advisors put strategies to work for clients like this already, and these don't really address the decumulation problem.  They just address the risk-avoidance problem.
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