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Dave Nadig
3:14
Then there are also per share finra fees.
and then there are various FILING fees, but FILINGS don't have AUM associated with them.
So while there might be a 121.20 fee I don't know about, I'd be surprised if that was the case.
THen of course, various exchanges have other fees as well.
3:15
And here's the follow up:
John
3:15
Also, as  with mutual funds a Custodian is not required if the mutual fund is willing to be audited 3 times a year, does this also apply to ETFs?
Dave Nadig
3:15
Also DEEPLY nerd-pool here.  So this part I think I MOSTLY know, but it changed like 6 years ago.  This is 17F2 in the 40 act.  its the part that says how a mutual fund (or ETF, or UIT, or CEF) has to custody its assets.
3:16
It USED to be quite complicated, but now it pretty much says "either you have to use a bank thats regulated, or you have a few other hoops to jump through."
I don't believe the auditing requirement is part of THAT rule, but the board due dilligence requirements go way up.
3:17
(this is relevant MOSTLY for Cannabis right now, as banks dont want to custody pot stocks, so MJ uses a non-bank, and I'd expect any new filing to use a non-bank as well).
Todd Rosenbluth - CFRA Research
3:17
Do you think we're going to some other large asset managers move off the sidelines and launch active ETFs in 2019 with PGIM setting a good example of how to do it.
Dave Nadig
3:17
Hi Todd!  (For anyone not at the conference, Todd did an Epic Rap Battle during our best new etf panel).  I hope you've recovered.
3:18
So, I will add Active to as my third "BIG TREND" from the event.  TONS of active product now on the street, not just a few fixed income funds.  Lots of folks putting out pretty interesting high-conviction products.
Legg Mason, for instance, has a handful of 50-80 stock funds and so on.
3:19
So it seems the barrier around showing holdings is falling pretty fast.
I believe a lot of new funds in the next year will be in a similar vein.
The issue (and this is where, for instance, Vanguard, who is a huge active manager in the mutual fund side) is capacity.
3:20
Any strategy you're worried can't grow indefinately you basically can't put in an ETF, because you just can't close an ETF to new money the way you can a mutual fund.
So, not EVERYONE, but I expect a LOT of big new issuers in the space this year, or expanded product lines.
ETF Fan
3:20
Can you link us to a video of Todd's rap battle?
Dave Nadig
3:21
(If todd sends me a link I'll paste it here).
Henry Hill
3:21
Can you explain what a put/write strategy is to someone that is a retail investor, and is that considered a hedge?
Dave Nadig
3:21
Hi Henry!  So both Put and Buy write strategies sell options, and collect the premium from that.
3:22
The traditional put write (in a fund like PUTW for instance) basically writes the puts "naked" -- they sit on cash, and then sell a put, usually at todays prices.
That means, if the market goes up, then you've collected some premium, and the options expire worthless.
Long term, what you end up with is a generally positive income stream.
3:23
The risk, of course, is if the market goes down a bunch, your puts come due, and you end up with equity exposure in a declining market (bad).
I don't consider either a "hedge" but rather a way of changing the pattern of returns from the equity market into an income stream.
3:24
There are other complications, most notably taxes.  Options strategies are generally taxed at a split 60/40 longterm/shortterm capital gains rate, which can get complex.
So, definitely an area to read up a bunch on before jumping in.
Here's Todd's "performance"
3:25
Speaking of the smackdown:
Goldie
3:25
So, I was at the "smackdown" this week.  You had some pretty harsh things to say about AAAU in a very small amount of time.  Care to elaborate?
Dave Nadig
3:25
So first off, the way that panel works is we each pick a fund or series of funds to promote as our favorite launch of the year (I picked the innovator defined outcome funds), and then we are assigned one of our competitors to "take down."
3:26
So even if I loved AAAU with all my heart, I had a job to do, which was to try and poke any holes in it I could.
So without having to be on stage:  AAAU is advancing the fee war in gold.  In general, that's great!  Also its an alternative to London-bank custody, which, if you're a gold bug who really cares about such things, is also great!
3:27
The holes I poked in it were really around security: the Perth Mint is not a bank, has a very different regulatory structure, and had some real cybersecurity issues in 2018.  Those are just true.
But I don't think its a terrible fund - i was just doing my job!
Herve Ragnan
3:27
What did Larry Swedroe mean at Inside ETFs when he said “the investment world is getting flatter”?
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