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Tracy McIntyre
3:26
Could an ETF ever "default," like ETNs can? Or are their structures just too different?
Dave Nadig
3:26
Nope.  But bad things can still happen.
3:27
In a traditional ETF, the underlying structure is just a mutual fund
literally the same -- it's a 40 act registered mutual fund.
As such, it's a separate trust actually owned by the shareholders.
There are custodians to hold the assets, and a board that you technically vote on to oversee things, and a contract with an asset manager to run the thing.
3:28
If that asset manager just went poof, the fund still owns it's own assets, and can just appoint a new investment manager (which happens rarely but does happen)
Of course, the fund could close (a bad thing) but thats not the end of the world.  You don't lose all your money, you just effectively get "bought out" whether you wanted to be or not.
3:29
A fund can also de-list, which happens VERY rarely, but again, CAN happen, and that's just like when a penny stock delists -- you have to sell out on the pink sheets.  I can't think of any 40-act based ETFs that have delisted off the top of my head.  Some ETNs have though.  It's a pain to ever unload them.
but youd have to really not be paying attention for that to happen
JJ
3:29
If you aren't a U.S, citizen, but buy a US listed ETF, is there a difference on how your dividends from them are taxed ?
Dave Nadig
3:30
So US listed ETFs dont do any internal witholding of dividends as a rule
So they just take whatever, say, IBM pays to them, and they in turn pay it to you.
3:31
If that happens in your taxable account (as a us investor), well, you report it in your taxes and pay something ... if you hold it in your IRA, you don't.
if you're a resident of, say, France, well, you'll have to pay whatever France says your supposed to pay on dividend income.
etc...
So it will be just whatever your local tax authority says
3:32
This is a fun one:
Micah Knudson
3:32
Whta's the shortest amount of time an ETF existed before it was closed (for whatever reason)?
Dave Nadig
3:32
This is a crazy one.  I believe the answer is "3 days"
There are a series of stealth ETNs run on behalf of Fisher Investments
Some of them are quite large (FIGY, I think).
3:33
They are bespoke products made really exclusively for his clients.  Good luck finding out much about them outside the fund pages here.
They don't market them at all, you wont find glossy fact sheets and whatnot.
And in March this year, they launched two new ones, I think internationally focussed
3:34
They openned on the 19th, and they closed on the 22nd.
And nobody I've ever talked to has been able to tell me why (if you're reading this and DO know why, please send me an email!!!!)
Easily one of the craziest stories in the ETF universe.
Peter Brady
3:34
How do you think the proposed ETF rule and the idea that it will become easier to launch an ETF will affect ETF market making space?
Dave Nadig
3:35
I don't see the ETF Rule affecting the market making community much at all honestly.
And I don't think the ETF rule will open some floodgate to 1,000 new funds.  There just aren't that many big investment management brands that aren't already in, or at least filed.
So short answer: not.
Darla Martin
3:35
Seems like ESG ETFs really sprang out of the gate hard, but hasn't seemed to have taken off. Thoughts?
Dave Nadig
3:36
I agree.  Although we've had some stealth winners, like Goldmans JUST.
I think it crossed 200 million in assets in about 4 months.
Thats pretty solid.
3:37
But I think it will continue to be a slow trickle.  A big sustained market downturn may actually help, as I suspect some money has moved/will move to the sidelines.  When it comes back, it may have broader perspective.
Jason F.
3:37
Hey Dave-- Is there a tool on this site where a user could simulate some "forward-testing" to see how they might do if they tiptoed into using ETFs? Like a practice run for a newbie to ETFs?
Dave Nadig
3:37
You know, that's a great idea, but I don't actually think I know any site for "forward testing" etf portfolios.
3:38
The financial web is woefully short on fully featured portfolio modelling websites or apps.  Likely because you need a lot of data to drive them, and it's actually a fairly sophisticated set of problems under the hood.
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