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Dave Nadig
3:25
Hi Nate (and don't forget to check out etfprime.com for the weekly podcast we do with his fine crew!_
So, there are, if I recall, SIX patents that touch on their ETF business.
There are two I have bookmarked that are the meaty bits:
7,337,138 and 6,879,964
3:26
The first is an ammendment of the second
and they were filed in 2005 and 2001 respectively.
Utility patents have a life of 20 years.
So, depending on how you count, the patents START expiring in 2021, and will be essentially done in 2025.
3:27
All that said, once the patents START expiring, I wouldn't be surprised for someone to challenge them and/or license them on the cheap.
The patents really HAVE been a defensive barrier for traditional fund companies
But I think we're still a few years off before that changes... and in the meantime, folks like Fidelity aren't sitting still
3:28
So much like the ETF Rule, I think when the patents finall go away, it just wont matter THAT much because so many folks will already be in the pool!
John Hancock
3:28
Dave:  A number of ETF providers contain a mix of equity, bond and commodities within the ETF.  Though the bonds often pay distributions monthly, shareholders may only receive distributions quarterly similar to the equity portion.  Do providers like Cambria and iShares improve the  yield any by passing along additional interest on the bonds for the months leading up to the quarterly distributions?
Dave Nadig
3:28
This is actually a broader issue -- companies pay dividends all the time, but most ETfs only make quarterly or at best monthly distributions.
3:29
So yes, the common practice in any portfolio management process is to stay fully invested.
So if you get a coupon payment worth $1,000,000, the fund manager should, all else equal, go buy a tiny slice of EVERYTHING in the portfolio to stay fully invested.
3:30
in actual practice, these kinds of small cash distributions are run through an optimization process.
ETFs, in fact, were originally invented in part to solve this "equitizing cash" problem for big institutions.
You cant buy everything in the S&P 500 efficiently with $1,000.  But you can buy 4 shares of SPY.
3:31
There is one HUGE notable exception to all this and that is in fact SPY -- Because its a unit investment trust under the hood, it can't, legally, reinvest dividends in ANYTHING
so there's always a few bps of cash drag when the market is going up, or buffer when its going down
Sidney Halwell
3:32
Is ETF.com planning on doing anything other than webinars for CE credits? Thanks
Dave Nadig
3:32
We are looking into this -- we used to offer CE credits to subscribers of the Journal of Indexes when we published that.  We're considering a way to make it available for our core education articles as well.  Stay tuned!.
Archie
3:32
Good morning! How does one get invited to Camp Kotok? :)
Dave Nadig
3:33
You'd have to talk to David Kotok!  It's entirely at his whim.  I've been very honored to be on the invite list these last few years.  Hopefully the recap articles have been a good glimpse of the discussions.
ok, one or two more here:
Alex L.
3:33
What are some great ideas for ETFs (in your opinion) that never really got off the ground?
Dave Nadig
3:34
Well, Target Date funds are in fact a great solution for a lot of smaller investors, but they just didnt make all that much sense in an ETF wrapper.
They're nearly dominant in 401k plans, and make sense for dollar cost averaging -- two areas ETFs are often a mediocre fit.
So not surprised they didnt work well in an ETF wrapper.
3:35
I think we've seen some thematic ETFs come and go a bit too quickly too -- MENU and BITE, for instance, solid approaches to a real sector -- restaurants.
I'm guessing we'll see those again.
OK, that's a wrap for today.
3:36
As I mentioned, don't forget to check out the weekly podcast.  Here's a link to this weeks:  ETF Prime Podcast: What's Behind 2nd Fastest Growing ETF?  https://www.etf.com/sections/podcasts/etf-prime-podcastwhats-behind-2n...
Thans everyone, and we'll see you next week, same time, same URL!
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