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Dave Nadig
3:28
It's not a fee, its a form.
The reason people hate it is it complicates your taxes significantly, and has a few quirks -- they can often be late, they mark things to market at year end, and so on.
its a bit of a "gosh I hope you have a CPA" ref flag for folks
3:29
the "no-K1" funds get around this by investing in a cayman islands subsidiary, which in turn, makes investments.
so the fund just looks like a normal fund, with one big investment.
(all of the above is about commodities funds).
3:30
It's not 100% that one is better than the other.  In fact the K1 funds may give you slightly better tax treatment of a commodities strategy, due to the nuances of how gains are taxed for commodity pools (that have to send the K1).
John Doe
3:30
If I look at fund flows day-to-day, can I use that to catch waves of investor sentiment?
Dave Nadig
3:30
So, we publish flows for days, weeks, months, and quarters on our site.
3:31
but I'd really be cautious about reading toooo much into them, especially over short periods of time.
All flows mean is "there was a buy/sell imbalance big enough for an authorized participant to arbitrage out a price difference between the ETF and it's underlying holdings."
3:32
But those flows can also be part of rebalance activity, or a big etf strategist making an allocation out of one fund into another with similar exposure for subtle reasons, and so on.
3:33
Over long periods of time, sure -- if you see a ton of money flow into, say, tech, its axiomatic to say "golly, investors are loving tech"
but I think using it as a signal for a strategy is a bit of a mugs game.  By definition, your chasing the past activity.
3:34
It's also the case that the data itself can be a bit noisy.  There's no regulatory requirement to post changes in share counts daily, so errors DO creep in.  Our data provider (FactSet) catches that better than anyone else (in my opinion) but corrections aren't unheard of.
Miss Piggy
3:34
What possible use could there be for a pet industry ETF or a space ETF? Are issuers running out of good ideas?
Dave Nadig
3:34
OK, the name made me chuckle.
3:35
So, it's reasonable to look at the filign (proshares I think) and wonder if we've gone too far
frankly you could say that about any narrow, thematic approach like this.
3:36
But its a BIG industry, and a legitimate part of retail, so if there's room for an online-shopping ETF, or a social media ETF, well, who's to say pets are a bad idea.
Some of these ideas will catch, and some wont.
It's not particularly new, we've seen this in the mutual fund industry for years.
3:37
the literaly worst case scenario is nobody buys it but you, and then the issuer closes it and gives you your money back.
ETFs closing isn't some sort of catastrophic event.
And remember, we used to have a "wound care" ETF so this is actually pretty normal!
Nimish
3:38
Hi, Looking for the best Tech ETF with momentum and new technology mix bag ?
Dave Nadig
3:38
We'll be surfacing some factor data later this year that will make questions like this super easy to get out of our screener, but I happen to have the data here, so I can just tell you ...
3:39
There's actually a specific ETF for this - PTF - the PowerShares DWA Tech  Momentum Portfolio
Which is very, very heavily loaded on the momentum factor (1.2 standard deviations away from a naive portfolio, if your a nerd like me).
3:40
Next in like would be the ARK Web 2.0 ETF (ARKW) or the Advisorshares New Tech & Media ETF (FNG) which both also score super high for momentum loading.
Hopefully soon you'll just be able to see that when you screen for tech ETFs on our website.
OK, one more question for the day ...
Garth Luccas
3:41
So ETFs are transparent and low cost. Are thre any negatives?
Dave Nadig
3:41
Sure - like any investment, there are always caveats.
ETFs are generally low cost -- but not all of them are.  You definately can find expensive ones.  And you also need to be very sure what you own.  ETFs have made access to anything really simple
3:42
but just because you CAN buy something doesn't make it a good investment.  So if you're wading into a new asset class for you - junk bonds, or commodities, or whatever -- make sure you understand what, and more importantly, why.
Structurally, the "T" in ETF is a real thing.  You need to learn at least basic trading hygiene.  Not using market orders, not leaving stop orders open, and so on.
3:43
ETFs are great tools, but they're just tools.  So's a chainsaw or a scalpel.
With that, I'll wrap it for this week.  Thanks everyone.  As I said, a transcript will go up shortly.
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