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Dave Nadig
3:24
Unless you have some reason to believe you know more, or know something different, than the collective wisdom of the entire market.
3:25
By definition, the price of China today contains the expectations of all outcomes weighted by probability.
Thats what markets do.
3:26
So by all means, jump in, but recognize you're playing with fire.  I feel the same way about buying a stock right before an earnings announcement.
Its basically the same play.
(as an aside, if you do make this call, make sure you know which china you want.  A-shares are very different than, say, FXI, and perform radically differently over even short time periods).
Danielle
3:27
Have credit rating agencies always been “wary” about liquidity in the ETF market, or is this something pretty new? Is this even founded?
Dave Nadig
3:27
I think old-school bond folks are all very skeptical of ETF liquidity.  Even very smart ones, and its not dumb to be skeptical.
Bond ETFs have weathered a lot of storms, but the real issue is what they've "replaced" in some peoples minds, which is the traditional bond desk.
3:28
That bond desk model gave people at least the illusion that on a no-good-rotten-very-bad-day, someone would answer the phone when you were tying to unload 1m of junk.
They don't necessarily believe that ETF traders and market makers will be there on that day (even though, historically, they have been).
3:29
But ETFs aren't magical unicorns.  Yes, there's going to be a price on that day.  But there's no guarantee it'll be a price you like.
(there wasn't in the old model either).
Skip
3:29
Hey Dave, are ‘strategic beta’ and ‘smart beta’ the same things? Is it just me, or is there way too much jargon in the financial world …
Dave Nadig
3:29
There is way too much jargon, and despite what a given marketing person might tell you, the two phrases are used interchangeably.
3:30
So: Yes.
And its a HUGE umbrella which includes everything from Value funds to crazy contango-beating futures black boxes.
OK, sorry to cut this at half an hour, but times a thing.  So last question here (and please come back and ask again! Or join the webinar next wednesday!)
Avery
3:30
Thanks for taking the time, Dave. When considering between 2 ETFs with the same or similar exposure, do you believe fees should be the deciding factor? We are seeing some fierce price competition with the big shops for broad market exposures, but I wonder if saving 1 or 2 bps is more important than other features of the ETF (tracking, securities lending, etc). Thanks.
Dave Nadig
3:31
So, I think it's safe to say "All else equal" price should be a big factor.
But your right to think that shaving a basis point is a bit foolhardy, because all else is rarely THAT equal!
Consider trading, consider structure, etc...
3:32
So yes, big chunks of expense?  Yes.  Shaving basis points is a bit sill.
Thanks for joining us everyone
3:33
and hopefully we'll see you next week, either here again on thursday, or on the webinar.
Have a great afternoon.
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