You are viewing the chat in desktop mode. Click here to switch to mobile view.
X
ETF.com Live Chat!
powered byJotCast
View Full Chat Next Page
Dave Nadig
2:59
Good afternoon and welcome to ETF.com Live!
As always, you can enter your questions in the box below.  I’ll get to as many as I can in the next 30 minutes or so.
3:00
After we’re done, well post a transcript at this same address, in case you missed something.
So, busy week!  Let's dig in!
Todd Rosenbluth - CFRA Research
3:00
Hi Dave. AdvisorShares changed the management behind its ETF this week. What do you think investors should do when the management or the index behind the established ETF changes?
Dave Nadig
3:00
Hey Todd, great question
the fund in question is TTFS I think, and this would be its second manager swap in something like two or three years.
3:01
it USED to be the Trim Tabs Float Shrink ETF, then it became something else, and now it's going to be a Doubleline Value fund.
Honestly, I look at things like this and shake my head a little bit.
3:02
There's something like 80 million in the fund, which charges 90 basis points, so I get not wanting to just shut it down and launch a new one.
And I supposed at least there's SOME throughline between the old strategy and the new strategy (as opposed to what happened when LARE became MJ, shifting from latin american real estate to pot)
But if I were a holder in this fund, I'd be very skeptical.
3:03
SHould you instantly sell? Well no.  But I worry a lot of investors just may not even NOTICE.
Which is really awful.
And if your an advisor, things like this are a real communications nightmare.
3:04
So the answer is: do the research and decide if you like the new fund, I suppose, but it all seems sad and unfortunate to me honestly.
Tony L.
3:04
Are ETFs necessarily more liquid today than they were, say, 5 years ago?
Dave Nadig
3:04
Great question!
A few ways to answer it -- there is definitely more money changing hands every day overall, across the ETF market, then there was 5 years ago.
But more interesting to me is how thats spread out.
If you look at SPY for instance.
3:05
It's average volume hasn't budged much -- around 80m shares on an average day.
but the further afield you go, the more you see the volume upticks.
so look at something like EFA (ishares developed markets fund)
3:06
Now it trades about 20m on an average day, twice what it did 5 years ago.
and you go through the top 50 ETFs by size, you see that everywhere.
You now have to go pretty far down the list -- hundreds of etfs -- to find ETFs trading less than 50k shares -- which is great for investors obviously.
Sergio Ianni
3:07
Is there anyone proposing ETF 'baskets' that are predesigned and managed based on algorithms and parameters that remain fixed as markets change? For example, someone who anticipated the interest rates increase by the Fed and the slowdown in stocks after 10 yrs of uninterrupted growth? Thanks
Dave Nadig
3:07
So, lots of folks run algorithmic ETF baskets, that's essentially what all robo advisors do.
3:08
And there are a whole separate group of folks we used to call ETF Strategists who either with an algo or with a human do the same thing.
There are literally hundreds of them, and the often eithe rtake money directly, as advisors, or sell their models to other advisors, who lean on them.
3:09
I don't off the top of my head know if any of them have specifically "called a top" a week or two ago.  I am sure SOMEONE did, and we'll see them on CNBC being heralded as a genius if we have a sustained bear market.
but the problem, as always, is the odds you found that person BEFORE the market turned is vanishingly small.
T. Frank
3:09
Are all ETFs "set-and-forget" like most equities, that you're supposed to just sit on til retirement, or do you have to keep a daily eye on them, to see if trades are warranted?
Dave Nadig
3:10
So, there's NOTHING about ETF's that is inherently set and forget.
From an exposure perspective, there's no difference (really) between buying SPY, buying the Vanguard S&P 500 index mutual fund, or taking your multimillion dollar account somewhere and having them manage a separate account
3:11
its all exposure to the S&P 500.  If you think you can set and forget it in one wrapper, you can set it and forget it in the other.
Certainly there are very low risk ETFs (say, a near-cash ETF like MINT or something) where you don't need to pay much attention
but there are also triple leveraged oil ETFs which you probably should be watching intraday as a trader.
3:12
So theres no once size fits all answer there -- focus on the exposure, not the wrapper, and then ask yourself what would cause you to make a trade.
Connecting…