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Dave Nadig
2:59
Good afternoon everyone, and welcome to ETF.com Live!
3:00
You can ask your questions in the box below, and I'll answer as many as I can get to before 30 minutes is up, give or take.
We'll have a transcript up at the end of the day, in case you miss something.
With that, let's get going, tons of questions backed up here:
Music Mike
3:00
And today's ETF wisdom is brought to you by musical guest ...?
Dave Nadig
3:00
Heh.  It's a meme now!  So I've been on a phantogram kick, so thats whats on right now:
Dan
3:01
Dave, did you see SEC Commissioner Hester Peirce's remarks on ESG ratings, likening them to the Scarlet Letter of Nathaniel Hawthorne's classic novel? What's your reaction?
Dave Nadig
3:01
This is a good one.  So Commissioner Pierce made some comments to the effect of:
3:02
If investors care about board diversity, that puts boards in the position of having to disclose things that we wouldn't expect in broader society.  So for example: self identifying your gender, sexual preference, ethnicity and so on.
Her argument, as I read it, wasn't "diversity is bad" but more "the devil is in the details."
Who "polices" whether someone is actually the specific ethnicity (or gender for that matter) claimed on a disclosure form?  Does the SEC get in the business of that?
3:03
She has a point.  I'm not sure it overrides the broader desire to have diversity on boards, but it does come down to definitions.  There's a lot of evidence that diversity of *background* makes for better decision making.  Different experiences, etc...
3:04
And most of the things we measure to support that goal are problematic, in one way or another, from a privacy and enforcement standpoint.
So I think there are some good points in this, but I don't think it somehow "kills ESG" or anything dramatic.  It's a conversation worth having.
Ken Fortuna
3:04
Hey Dave, bitcoin just had a huge jump for the first time in a while. That can’t solely be due to the Libra ETF filing, can it?
Dave Nadig
3:05
Not to put too fine a point on it but: who knows.  No, I don't think the rather thin whitepaper around Libra is directly responsible.
But one of the issues with Bitcoin (and other crypto) is that one of it's key selling points (decentralized trading, annonymity) means we really have no way of knowing.
To be fair, when MSFT goes up 10% we don't really ever know why, causally, either.
3:06
Usually we can point to a piece of news, but ultimately, things go up because more people want to buy at the current price than sell, and the price goes up until there's equilibrium.
But the WHO and the WHY of the buyer we rarely know, except for things like 13F filings from institutions, which give a very incomplete picture.
3:07
I do think there's some safe-haven buying going on.  We're seeing it in gold too.
Todd Rosenbluth- CFRA Research
3:07
Hi Dave. What has been the biggest surprise to you in ETF land in first half of year?
Dave Nadig
3:07
Hi Todd!
So, I guess I keep seeing examples where the flows aren't following performance the way we always think they do.
3:08
You can troll through segment after segment, and we just don't see flows following outperformance the way we've seen in the past.
I mean, take GDX.
3:09
GDX is just CRUSHING
up 25% in a month.
has -400m in outflows.
Instead we see low cost beta continuing to blossom in flows land
So I'm not sure what any of that means, but it's for sure got me scratching my head.
3:10
Half the time I see things like that and I literally think the data is wrong, until I dig deeper, and time after time, funds that are crushing it aren't getting flows at all, often the opposite.
Terese Finau
3:10
In considering dividend ETFs, anything specific that investors should consider besides current yield?
Dave Nadig
3:10
Great question.  So there's a lot of debate about whether dividends are a "factor" or whether in fact they're just yield generators.
3:11
If youre JUST looking for yield, the big question is "why is this portfolio paying such a high yield."
Many times its mostly just investor preference.  As in, utilities traditionally pay decent dividends, so utility company CEOs keep that up.
3:12
But sometimes a stock is super high yielding because it recently got plastered in the market (after all, the denominator of yield is price)
So look at the companies for sure.
THen secondarily: there's a big chunk of Dividend etfs that focus on so called "aristocrats" - companies that increse their dividends year after year, often for decades.
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