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Dave Nadig
3:00
Good afternoon!
Welcome to ETF.com LIve!
As always, you can enter your questions below, and I'll get to as many as I can in the next 30 minutes or so.
We'll post a transcript up at the end of the day in case you missed anything, maybe with a little video if I find the time!
3:01
But let's get going on the questions ...
Bob the Builder
3:01
Soundtrack?
Dave Nadig
Todd Rosenbluth-CFRA
3:01
Hi Dave. Yesterday SPHB shrunk in size by half and has approx $150M in assets. Are you surprised that a high beta alternative to offset the billion dollars of assets in Lower vol SPLV and USMV has not garnered more interest for those seeking a risk on equity approach? Thanks.
Dave Nadig
3:01
Hi Todd!
So, SPHP is sort of the anti-low-vol fund.  It specifically goes after high beta stocks -- those that go up or down MORE than the market overall.
3:02
I think the reason it hasn't found the traction of the low-vol funds is pretty simple: there are a lot of ways to increase your risk and still just get core equity exposure
And those are ways I think people already know: buying underdiversified themes, buying small caps, buying growth or momentum ETFs.
Those all serve a similar purpose.
3:03
So I think "high beta" adds a layer of complexity to a thing people already have a lot of intuition about.
It's much less obvious for most investors how to get market-like returns with LESS risk.  Which is why we have succesful dividend funds, and low-vol funds, and even the defined outcome funds.
3:04
Maybe that's a bit of an obvious answer, but it's how I'd see it.
Jacob S.
3:04
How long do you think the SEC’s information gathering period will last re approving a bitcoin ETF? Isn’t approval ultimately inevitable?
I mean, do folks interepret that they're dragging their heels, or do you think they are genuinely operating out of an abundance of caution toward investors?
Dave Nadig
3:04
I think the delays on bitcoin are prudent, actually.  As much as I'm a big fan of clever and innovative, I completely understand why the SEC is seemingly slow playing this.
I mean, if you think about it -- there's not an easy way to stick the genie back in the bottle.
3:05
So doing a LOT of thinking and comment gathering, and having what amounts to a very slow dialog with the crypto community -- it makes sense to me.
I do agree, I think it's somewhat inevitable.  But the dialog could take a long time.
If I had to make an over/under bet -- probably like November would be where I put the over/under.
Judy Larkin
3:05
Hello Dave. I’m an editor, and therefore know I can’t be objective about my own writing, so I like to have someone I respect review my work. This makes me wonder if you think financial advisers ever get an expert to review their own portfolios, or if they largely solely heed their own advice. Thanks.
Dave Nadig
3:06
What a great question!
I do know quite a few advisors who do portfolio reviews with colleagues, and the advisor community in general talks a LOT among themselves about everything from how to react to angry clients to how to react to angry markets.
3:07
But it's also the case that the "advisor as portfolio manager" model isn't necessarily the default.  A lot of advisors, whether their RIAs or working for a large wirehouse, lean on models.
those models in turn are often from either big, qualified in house team, or from a big external firm with a well documented process and track record.
3:08
The best folks I know, though, are CONSTANTLY second guessing themselves, and exposing themselves to new ideas, challenging their sacred cows and so on.
3:09
That's part of why I enjoy interacting with the advisor community on financial twitter and conferences so much: folks like Ritholtz, or Meb Faber, or Nate Geraci etc.  They're always in a dialog about whats going on and how it affects their clients.
Melissa
3:09
Inasmuch as the slow march of time changes many things, like ETFs gaining ground on mutual funds, who’s doing better right now: active or passive managers?
Dave Nadig
3:10
Well, from both a performance and asset gathering perspective, it's been a long, long time since active managers as a class have had a good year.  There are definitely some who do well, but as a class, they continue to underperform, and they continue to lose assets to passive.
I think the interesting quesiton is whether we get a natural shakeout that improves both the story behind active, and the reality, in terms of performance.
3:11
I suspect it will take more time.  But it's great watching some of the newcomers to the ETF space that are truly active -- Davis, Ark, etc. -- have some success.  I think its healthy for the business.
Eustace
3:11
Did MJ’s issuers retain most of their investors once they changed that ETF from a Latin America fund to a marijuana fund? Was such action even legal (or considered above board)?
Dave Nadig
3:11
So when ETFMG (the firm behind MJ) migrated the LARE fund to MJ, there were only a handful of large investors.  The largest one of our reporters contacted and they had NO IDEA the fund was even changing (and weren't happy about it).
3:12
MJ gathered assets so fast, the snide answer would be "it doesn't matter"
I dont think if theyd retained all, or lost all, it would have made a whit of difference on the growth of the fund.
As for whether it was legal -- yes it was all done legally.  Whether it was 'above board' is a judgement call.  I think it was ... odd.
Art MacCombe
3:12
I’m struggling to understand why President Trump issued $16B more in farmer aid since the tariffs are what’s hurting them. What am I missing?
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