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Dave Nadig
3:27
The latter doesn't matter much if you're buying treasuries -- a treasury ETF has the same credit risk as a single T-Bill.
it matters a LOT in corporate bonds.
3:28
The "splitting the difference" approach is target-date bond funds, of which there are a ton now.  So you can buy an ETF that holds bonds that all mature in, say, 2025.  And you basically get the experience of owning "a bond" but the benefits (flexibility, tradability, etc) of owning individual bonds.
Once you get outside of treasuries, however, I think the diversification benefits are overwhelming.
in favor of funds.
Todd Rosenbluth - CFRA Research
3:28
Hi Dave. Lyft is going public this week and more high profile companies are likely coming. Given how most ETFs are index based and iShares can't just add these to their growth funds, do you think this could drive interest in active equity ETFs like ARKK that has more discretion? It owns Telsa and Twitter.
Dave Nadig
3:29
Hi Todd.  I absolutely think that a revitalized IPO market is good for a handful of ETF players.
ARKK/Davis/Etc -- they can (if they want) buy IPOs day-of.  Heck they could get allocations if they wanted them badly enough.
I also think IPO funds like IPO can really benefit obviously.
3:30
(the huge caveat of course is chasing hot IPOs isn't necessarily a great idea, but that's not the question your asking).
ARK, as an example, made noise by being the first to include any kind of bitcoin exposure by buying GBTC.
3:31
While im not a fan of GBTC (sort of a fake-ETF-alike that's just a company under the hood), it was (being cynical) good press for a while!
I know they didn't buy it for that reason at all -- I've talked to the PM about it.  But it had that side benefit.
Deirdre
3:31
Is it ironic that Vanguard may soon be the top ETF flows recipient since Bogle was so against ETFs?
Dave Nadig
3:32
I think Bogle's dislike of ETFs has been slightly exaggerated by the press, honestly.
He was concerned not that there was any inherent flaw in ETFs, just that they were a very sharp tool to be handing investors, who could use them to get into trouble.
That is, to say the least, very "on brand" for Bogle.  His whole career was about concern for the little guy investor.
3:33
But he spoke regularly at ETF.com events, and graced the pages of our magazine many many times.  He was always willing to engage in the discussion.
Bob
3:33
Saw the news about Schwab launching a monthly-subscription based financial planning service.  Thoughts?
Dave Nadig
3:33
I LOVE this move by them.
3:34
Rick Ferri had a tweet where he called the idea of a 1% advice fee the last bastion of "gluttony" in financial services, and I have to agree.
I don't think paying $40 a month or whatever is the right move for everyone.  THere are some folks who may be better off with a different fee structure.
but I absolutely love the idea of paying directly for advice, instead of going through an AUM based fee.
3:35
if I have 2M in assets and you have 1M in assets, am I really getting twice the "advice" you are?  Do I take up twice as much mental real estate with my advisor?
it's just sort of the wrong scale.
I think ultimately, paying directly -- whether its retainers or hourly or subscription based -- makes so much more sense for the actual investor.
3:36
Its a bit of a mental shift though.  A lot of investors don't think about what they pay explicitly when the fee is baked into assets.
But I suspect most of them would pay less if they actually paid by the hour.
Gregg F.
3:36
Would abolishing the ACA affect health care ETFs?
Dave Nadig
3:36
Oooh boy, that's a big hair question.
3:37
The conventional wisdom is that deregulating the insurance industry (which is the most immediate corporate impact of an ACA dissolution) would be good for their bottom lines.  So I guess "yay BCBS?"
3:38
But the amount of chaos implied in such an outcome is difficult to even wrap my head around.  There are SO many unknowns.  If millions and millions of folks now don't have insurance because, say, all Medicare expansion goes away, that likely has profound economic impacts
on everything from consumer spending to drug company profits.
So I don't personally feel like this is a think you can "play" with a an ETF.  It's just frankly too big, and too much of an octopus.
3:39
Its an ENORMOUSLY large part of the overall economy to just toss into a bin and shake around to see what happens.
BlockchainNewbie
3:39
Why did CEDEX procure physical diamonds in planning to launch its diamond ETF? Is this usual practice for launching (“commodity”) ETFs?
Dave Nadig
3:40
So a lot going on under this question
3:41
My understanding is that they basically bought up an inventory in order for people to trade against that inventory in shared lots on their blockchain based exchange.
I don't THINK (and honestly, its been hard to follow) these are specifically to seed 50mm in an ETF.
3:42
BUT, if they follow the model of something like GLD/IAU/BAR -- they do need a facility to move diamonds in and out of the ETF, and there's not really the equivalent of the London gold buillion market, with it's established vaulting system.
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