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Dave Nadig
3:00
Howdy folks!
Welcome to the ETF.com Live Chat for today.  As usual, you can post your questions in the box below, anonymously if you like.
I'll try to cram as many answers as I can into the next half hour or so.
3:01
We'll post a transcript up at the end of the day.  And for future reference, you can always hop on thursday morning and get your questions in if the 3PM time slot doesn't work out for you.
With that, let's get rolling.
P. Northfield
3:01
Would there be a benefit to putting an ETF (or a mutual fund, or a futures contract, or any investment) on a blockchain?
Dave Nadig
3:01
While I'm a bit of a cryptocurrency skeptic, I'm a big fan of the underlying blockchain mechanics.
3:02
Blockchain is a super interesting way of keeping track of transactions in a distributed way, so you could imagine a world where equity share ownership moved (somehow) to a blockchain.
Right now it's up to the DTCC to keep track of who owns what, and further down the chain, the accounting and transfer agency functions of large brokerages.
(The DTCC doesn't know you exist, they know Schwab exists).
Blockchain could potentially allow for a very tidy and efficient way of processing transactions.
3:03
Nothing particularly ETF-ish about it.  It's more just any financial transaction.
Of course, these are regulated markets, so I imagine such a move would take a long, long time.
It's more likely you see it in things like distribution of index data, which I believe vanguard is using it for.
Mickey
3:04
What are your thoughts on the best interest rule?
Dave Nadig
3:04
So, we're talking here about the SEC's new proposal, which essentially replaces the Fiduciary Rule.
3:05
Jay Clayton is currently on a bit of a media tour talking about it, I saw a good Barron's piece on it just like 20 minutes ago: hold for link :
While there's nothing BAD about it, my concern is it's not GOOD enough.  The comment Marcia Wagner makes in that article is the nut of the problem (and she may be one of the smartest people I've ever met).
3:06
Which is that at the end of the day, it just tosses everything back on FINRA arbitration.
And there's no clean legal definition of what "Best Interest" means the way there is for a fiduciary.
So A for effort, but I don't think it's as far as I'd personally like it to go.
Jerry D.
3:07
I saw on your site this week that, for example, Aberdeen Standard Investments bought ETF Securities’ U.S. operations. Do you foresee consolidation, or should I say, fewer ETF issuers -- or, conversely, more? Either way, is there a benefit to investors?
Dave Nadig
3:07
Hi Jerry -- so, Aberdeen is just the latest - there have been a string of these "old-school investment company buys upstart ETF company" transactions in recent years.
3:08
The reasoning is obvious - its a jumpstart that gets you some regulatory head start, and more importantly, some expertise.  That's why Janus bought VelocityShares, for instance.
I think we'll continue to see what we're seeing -- huge concentration in the top 3-5 firms, and lots of small firms wading in.
so the 80-20 rule on flows may end being a 90-10 rule.
3:09
but the flows, in general continue to be so strong, that there's actually a fair amount of room at the mid tier for folks who have either a unique proposition, or embedded distribution.
Is it good for investors?  Well, competition is in general good (pricing, choice, etc.) but it makes the challenge of ETF selection even harder.
it can encourage "rule of thumbing" your investments (just buy things I've heard of, just buy things everyone else is buying).
And that's usually a bad idea.
3:10
So it makes investors/advisors life harder, but the end results probably better.
Anonymous
3:10
Everyone says to "look under the hood" of ETFs and better understand them. What are some tools to help me do so?
Dave Nadig
3:11
(Note: funny "anonymous" names are funny, but don't make me edit your name please!!! I did this one,because its a great question)
So, first stop should of course be right here, at ETF.com/ticker (so, ETF.com/spy for instance)... but you you already know that, because your here.
3:12
But even if you ignore us, you should ask yourself the same questions, wherever you get the data:  does the fund do what it says, well (efficiency), can I get access to it reasonably easily (tradability), and is the exposure what I really want (fit).
You can wade into most issuer websites and actually construct that opinion yourself from the ground up -- it just makes apples-apples across issuers a little bit tough.
3:13
Almost all issuers post their holdings daily, however, and you can always mess with that holdings list.  You can use your own brokerage account, or dump the stocks into yahoo finance, or whatever tool your comfortable with.
3:14
You can also of course get other folks take -- Morningstar, ETFDB, ETFTrends, Bloomberg, wherever -- sure, they're sort of competitors, but its a big market, and there are a lot of different points of view.
Todd Rosenbluth - CFRA research
3:14
In your 2018 bold predictions piece you highlighted boring defensive ETFs having chance to shine in market pull backs. What are some examples to you that are well constructed, easy to understand and cheap given recent and expected volatility?
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