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Dave Nadig
3:52
So big question, I'll answer it, but also, check out our guides section: https://www.etf.com/etf-education-ce.html
So most ETFs are in fact just mutual funds under the hood
but they get permission to do two key things:  trade on an exchange, and change how money comes in and out of the fund.
3:53
The latter part is called "creation & redemption" and it means that big firms on wall st can make blocks of new ETF shares (or get rid of them) by moving baskets of securities in and out of the fund
Unlike a mutual fund, where we lowly investors just send cash to Fidelity or whomever.
when you dig in - that gives all sorts of benefits.
lower costs, the ability to delay taxes, transparency, and so on.
3:54
but again - under the hood, most ETFs are just funds.
Jim Taggert
3:54
Has the fact that the Fed's raised interest rates 3 times recently impacted ETFs at all; could it going forward if they keep increasing?
Dave Nadig
3:54
Hi Jim.
Well, the impact is exactly what the impact on Bonds overall has been.
So if you take the iShares 20 Year Treasury ETF for instance:
you can see the impact -- its down substantially!
As rates go up, bond prices go down.
its one of the only inexorable truths to investing.
So again, it's just about what the ETFs hold.
3:56
The broader question (and I've skipped a few of these questions) is whether the slow climb of fed target rates is going to have a big economic impact
and spread out from bond prices into other asset prices.
My basic answer is "probably not."
The economy is doing well by almost all measures -- it has been for years, and we're just continuing that path.
3:57
so the fed is doing precisely what it's supposed to do.  Normalize interest rates.
What's normal?  Depends who you ask.  We probably have another percent and change to get there though.
3:58
OK, that’s going to do it for today.  We’ll have a transcript up shortly.
Next week we should be back to our normal Thursday 3PM routine.
Also, for the advisors in the room, I'm hosting an interesting Webinar on the 30th:
3:59
With Style Analytics.  They have some pretty cool tools for factor analysis of ETFs were going to walk through.
Definitely appealed to my nerdier due diligence tendencies.
Thanks everyone.  See you next week!
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