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Dave Nadig
3:13
Hi Alex - so, we do cover ESG off and on as it's relevant here at ETF.com
we also feature a full suite of ESG data in our finder, so you can see the various funds scores on anything from impact to carbon.
3:14
But, your point is well taken.
ESG etfs have been a bit slow to catch on, and I think the reason for that is a bit simple.
ESG investments tend to be long term, not traded, and they tend to happen when money changes hand.
3:15
What issuers are relying on is the generational wealth transfer which is slowly moving $30 Trillion from the baby boomers down to their kids.
What we see, in study after study, is that tends to be when the ESG conversation comes up.
So I'm a believer, but I think its a long, slow process, and we tend to be pretty short-term focused in the ETF realm.
3:16
I think we'll see the products sneak up on us over time.
Eleanor
3:16
I'm trying to understand the pricing, how can an tech ETF such as QQQ, consisting of shares like apple, google ect.. Be less than say $200. If I was to create a portfolio of 5 blue chip stocks, 1 share each, the cost needed would be a lot higher right?
Dave Nadig
3:16
So this is an interesting question.
Since an ETF is just a fund, it follows the same rules as pretty much any mutual fund.
3:17
the VALUE of the fund is the sum of all its assets.  So say its a billion dollars.  It's got all sorts of stocks in it.  thousands of shares of Apple and so on.
so that's the denominator - a billion.
The numerator, however, is just how many shares exist.
and when they launch the fund, they can make that number anything they want.
3:18
So if you launched with 10million in seed, you could, theoretically say "OK, lets issue 10 million shares" and then each share would be worth a dollar.
or you could say "lets issue 1 share" and it would be worth 10 million.
3:19
And by splitting/reverse splitting, they can change the value anytime they like as well.
3:20
So for instance, if the trading price of an ETF gets to $1000, well, that might make it hard to trade, so they can just split it 10-1, and then its magically priced at $100, and all the existing shareholders go from owning one share to owning 10
it happens all the time actually.  Almost weekly.
Hope that clears it up.
Neil P.
3:20
what's the difference between target-date and target-risk and target-outcome ETFs on your site
Dave Nadig
3:20
Hi Neil!  So, there aren't any target-date funds left in ETFland, but there are target-risk and target-outcome.  Which is confusing, I get it.
these come from FactSet's classification methodology which you can find:
there.
but to directly answer your question, it's based on what the fund literally SAYS it's trying to do in the prospectus.
3:22
If it's an asset allocation fund that is trying to, for instance "beat the S&P"
Well, thats a target outcome
If the fund says "the goal is to maintain exposures to three asset classes, based on their measured risk over time" or something, well, that's target-risk.
3:23
Its a somewhat arbitrary way of bucketing up the asset allocation funds, which, as a class, are often trying to do some interesting things -- flipping between, say, stocks and bonds.
3:24
(Going back a question: we do have a socially responsible channel, which you can see here: http://www.etf.com/channels/socially-responsible)
Jerome
3:24
HI Dave, Do you think that investors new to the ETF space might be overhwelmed by how many there are, and just focus on the trendiest names?
Dave Nadig
3:24
Heck *I* am overwhelmed by how many there are!!!
I think what happens is actually the same thing that happens when we all read the news.  We all have a filter of some sort.
3:25
Maybe you just read the Times, and you use that as your filter.
Maybe theres someone you follow on twitter who you agree with, and they post news stories, and thats what you look at.
But we all have SOME sort of personal filter.
I think choosing funds -- or any investment -- actually works a bit the same way.
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