You are viewing the chat in desktop mode. Click here to switch to mobile view.
X
ETF.com Live Chat!
powered byJotCast
Prev Page View Full Chat Next Page
Dave Nadig
2:12
In the narrowest markets, like junk bonds, the ETFs actually act as the "real" market when you get stress
2:13
"stress" in bonds tends to mean nothing changes hands.  Bonds lock up.  But the ETF will generally trade a ton -- so the "right" price is the one the ETF is trading at.
not some hypothetical price a non-trading junk bond "should" be at.
So in short: the arbitrage mechanism continues to keep ETFs trading in line, even when weve had some rather dramatic price moves.
Even in 08/09, ETFs did what they said on the tin.
ETF Bro
2:14
What percentage of fixed income ETFs create/redeem in cash?  I get why it's done for loan or high yield ETFs but are there any positives to creating/redeeming fixed income ETFs?
Dave Nadig
2:14
So a lot of bond ETFs do creations/redemptions in cash, but its hard to get a precise percentage because it literally changes every single day.
Some firms like PIMCO are pretty notoriously cash only, but firms like Blackrock can do cash one day, and in-kind the next
or even cash for creates, in kind redemptions.
2:15
As to why bother?  It's usually a judgement call on the part of the portfolio manager about what they think the most efficient thing is.  If they believe they can take cash and get better prices, quickly, they'll do that.
Steffen
2:15
Hi Dave. What are you thoughts on the Stoxx - Axioma merger?
Dave Nadig
2:16
So the headline here is Deutsche Borse, the exchange, which owns Stoxx, the index provider, bought axioma, and is mashing them together.
Axioma is primarily an analytics engine.
So when you stick the two together, you end up with a company that looks a bit like a mini-MSCI.
2:17
MSCI, after all, is in precisely those two main businesses as well.
So its a model that clearly works. That said, I'll be curious whether you see Axioma-branded indexes start to come to the front.
Theyve; collaborated in the past - i think they have some Stoxx factor-based indexes already.
2:18
So it seems quite logical given the margin pressures in the index space.
Dustin
2:18
What say you to detractors who call ETFs a craze or an obsession?
Dave Nadig
2:18
Well, it's been 25 years or so, so this is hardly like TikTok or Fortnite!
ETFs are just a more evolved version of wrappered investing -- its a better mutual fund than a mutual fund for most (not all) use cases.
2:19
So as money comes out of mutual funds naturally (profit taking, panic selling, minimum distributions, inheritance, whatever ...) its entirely logical that the money ends up in ETFs eventually.
I think Direct Indexing is the next one in line - it will do to ETFs what ETFs have done to mutual funds.  But just not right away.  Like a decade from now.
Todd Rosenbluth - CFRA Research
2:20
Hi Dave. What piece of ETF jargon do you wish the industry would stop using to make it easier for more novice investors to understand us ETF nerds?
Dave Nadig
2:20
Beta, Smart Beta, Strategic Beta, Alpha
These are "assumed" to be understood.  Most investors I talk to really have no idea what they really, truly mean.
2:21
Now, I don't have a BETTER word for the concepts they represent, so it's a bit of a cheap shot.  But I think this is something we all don't do a good enough job explaining.
ESG is similar - nobody can even agree on what it means.
J. Rose
2:21
Hello Dave, How have MLPs been doing lately?
Dave Nadig
2:22
Short answer: Pretty much in line with the market last time I looked.
Long answer: I haven't even *begun* to really think through how the various MLP structures have played out in terms of peoples actual 2018 filed taxes.
Tax and structure are incredibly important for MLP investing.
2:23
Here's our core article on the topic:
We had an RIA interview a while back going through some of the details.  One sec.
Its worth noting that while "marketlike" so far this year, MLPs as a total return vehicle are tough if you look like, over the past 5 years.
So it really comes down to the tax/distribution advantages, which requires a substantial amount of homework to match the right fund with your very specific tax situation.
Jerry
2:25
Hey Dave, Today I read an article that said some ETFs have “collapsible payouts”; what is that?
Dave Nadig
2:26
I'll be honest, I've been in this business for a long time, and I have never even heard this term before.
Connecting…