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Dave Nadig
12:59
Good afternoon!  Welcome to ETF.com Live!
1:00
As always you can enter questions in the box below.  I'll get to as many as I can here in the next half hour, and we'll repost with a video by the end of the day, in case you miss something.
With that, let's get rolling!
Bob
1:00
What's our trading soundtrack for the day?
Dave Nadig
1:00
Nothing like having a regular gag.  Today I'm listening to Minus the Bear:
1:01
Can't get spotify to link, but paste it in google, you wont be sorry.
Duncan S.
1:01
What are “Growth” and “Value” ETFs?
Dave Nadig
1:01
I love how we absorb these words and never define them.  This is a shockingly good question.
Because no two people will ever agree on the answer.
Conventionally, Value stocks are those which trade at a low price to something.  Usually a low price to book value.
1:02
Growth stocks are sort of an antithesis to value -- but its not just high price to book.  It can be anything from momentum factors to increasing earnings yield to free cash flow growth over time.
1:03
Historically, people have looked at value as a kind of long term way to generate alpha, because cheap tends to mean "beaten down" or "overlooked."
I'm not actually convinced anything is overlooked int he modern markets anymore, however.
the most important thing when looking at this in ETF wrappers however, is style consistency.
One persons growth methodology might get apple a top spot, but another companies value methodology might put apple in too!
1:04
And some methodologies split a universe like the S&P and just say "we'll put the 250 valuey looking stocks in one fund, and everything else int he growth fund" and so on.
its a deep, deep pool of research.
Mason J.
1:04
What’s a 'heartbeat' trade?
Dave Nadig
1:04
So, quick link:
Elisabeth Kashner (former head of research here) and Lara Crigger (one of my writers) have been chasing these weird looking flows numbers for years.
essentially, when a fund wants to sell some of ABC in order to buy some XYZ as part of a reballance, they have two choices.
they make the trade (potenitally booking a capital gain)
1:06
or they can "push" the ABC shares out, and then get some XYZ shares in, through the creation redemption process.
when they do the latter, they find a friendly counterpart to do the big create, then the big redeem.
This keeps average investors for getting a gain just from reballance activity.
1:07
It helps ETF investors defer their tax bill until they actually book a gain.
(its been making headlines because BB published a wooly-headed take on it, based on our research here and at FactSet).
Evan
1:07
In the whole of the finance arena, how’d you decide you wanted to get into ETFs in the first place (as a career)?
Dave Nadig
1:08
Completely by accident.  I started at Cerulli Associates, which I founded with Kurt Cerulli back in ... 1991? Something like that.
and we talked to a LOT of advisors making the move to fee only.  As part of that I got interested in the 401k market and indexing.  Wells Fargo Nikko (then a huge index company) hired me to help with "retailizing" their index expertise.
1:09
Several years later, the firm became BGI (which became Blackrock) and they started looking at ETFs in 1995ish.  I happened to be in the room
I'd love to say I was all over it -- I wasn't  I thought they were doomed.  I couldn't figure out how to solve the chicken/egg problem of getting the initial assets and trading going.
Glad I was wrong though!!!  And I've learned a lot along the way.
Phil
1:09
What ETFs do you think will hold the most shares of Uber and Lyft by year end?
Dave Nadig
1:10
Well, the easy answer is IPO or FPX -- two IPO focussed ETFs.
They're the most logical.  But from there I'd look to Kathy Wood at Ark.
Shes super smart about emerging tech companies, so if she thinks they're worth the price of admission, I'd expect her to load up.  She makes high conviction bets.
1:11
So I'd watch what she does, or at least subscribe to Ark's regular updates.  They broadcast their trades
Nate Geraci
1:11
Do you think all ETNs should be *required* to have an early redemption or call provision that is essentially automatically triggered upon an ETN delisting in order to prevent zombies such as DB's ETNs? https://www.wsj.com/articles/deutsche-bank-squeezes-out-investors-in-i...
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