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Dave Nadig
3:13
There's always a bit of a risk that one day, the IRS or someone else in the government wakes up and decides that in-kinding securities should be a taxable event.
There are HUGE implications for this however, that go way, way beyond the ETF industry
3:14
There's a great piece (one sec for the link) on the history of this:
It actually goes back to a 1935 court decision
3:15
So it's not just a loophole -- its actually part of how a lot of economic activity gets done, and taxed (or not taxed).
So in short: not something I loose much sleep over.
AS for the issue of penetration into 401ks?  Seems unlikely to be a barn burner.  While the technical issues (things like fractional shares for low-dollar, frequent contributions) can and have been solved, mutual funds are actually a nearly purpose-built product for 401k investors.
3:16
And frankly, most etfs are too cheap -- theres no room in the expense ratios to pay for recordkeeping services.  That means any pure, cheap, ETF-centric 401k plan would have to have explicit charges.
Which, while I would applaud, goes against the current grain of the K-plan sales ecosystem!
julio
3:16
What are the risks of these "defined outcome" ETFs ?  UOCT, BOCT....
Dave Nadig
3:17
Boy these products keep coming up, so clearly they're onto something!!!
At the core, these products just cap your upside, and use that to buffer some of your downside risk.
I don't think there are any weird or unpredictable blow up risks or anything.  The products are well designed (in my opinion) and do what they say on the tin.
3:18
The biggest issue is that they're pretty complex, and a bit tricky to explain.
I think they're real, useful innovations, and I think for a lot of investors -- and advisors in particular -- they can be a real value add.
So I think it's WORTH doing the learning, but there is learning to be done.
I'd start at their site:  http://www.innovatoretfs.com/define/
3:19
and if you get lost? well, maybe they're not for you?
Reed T.
3:19
It’s obvious the shutdown is detrimental in myriad ways. Is there even one positive thing about it that the layperson is missing/
Dave Nadig
3:19
From an investors perspective?  Not that I can see.  Pretty much every angle I can come up with is net-negative for the economy, for your portfolio, for individual companies, and for sure for anyone directly impacted.
3:20
I know some govt contractors who not only aren't getting paid, their contracts are suspended -- they won't get backpay or anything.
Whether there's political hay being made on either side? Not really my lane.  But I can't see a "good" in this at all.
Anonymous
3:20
How was it that some "hacker" was able to fool such media outlets as the Financial Times with a fake letter from BlackRock? Has this kind of thing happened before?
Dave Nadig
3:20
I am actually VERY surprised this doesn't happen more often.
3:21
It's shockingly easy to send press releases out saying whatever you feel like saying.  It's also shockingly easy to do things like spoof where an email looks like its coming from.
And heck, we saw the fake, physical copies of the Washington Post -- that's easy too.
Whats harder is to do these things in a way that leaves no trace.
3:22
So sure, I think spoofing something like an earnings announcement could catch a LOT of people off guard, in this world of social media, stocktwits and so on.
But it's objectively a crime. So the question is if people think they can get away with it.
3:23
OK, going to close early with one or two from a very prolific questioner here (grin):
Tangent Style
3:23
What do you think is the most important data source / data vendor in the ETF ecosystem?
Dave Nadig
3:23
Well, I'd love to say ETF.com, but genuinely, I think there are three (from an investors perspective) that matter, and they all have strengths and weaknesses.
3:24
I'm a bit biased, but I think FactSet has the best core data set and analytics (I'm biased because I helped build it, and sell it to FactSet, and it's still 90% of the data we use here at ETF.com).
So that to me is the baseline.
Bloomberg is unquestionably the "most important" from an ecosystem perspective however.
3:25
You would never in a million years launch an ETF without being extremely sure BB had all your data correct.  They drive so much of the institutional market... not just trading either.
they've got their fingers in everything, from creation/redemption baskets to commodities analysis.
And last, I'd have to say Markit, primarily because they're the biggest provider of clean, pre-market portfolio composition files to the authorized participant community.
3:26
thats a huge, invisible piece of plumbing that keeps everything running.
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