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Dave Nadig
3:12
Taxes, efficiency, probably outright cost, trading, etc...
3:13
its all tilted in favor of the ETF structure.
Glenn
3:13
Any types of (or specific) ETFs for playing the trade war?
Dave Nadig
3:14
Well, there are a LOT of ways to play that question.
Putting my Econ hat on: trade wars are bad for everyone.  Seriously, they're just a giant tax.  So a lot of the concern were hearing this week is the trade war comming  home to roost.
3:15
So if you believe that, well, GLD is sitting right there.  I say that half in jest, but, the run into bonds, gold over 1500 -- those are all reactions to the trade war in their own way.
the more boring answer is "yes there's a fund that SPECIFICALLY says its going to win the trade war" and thats http://www.etf.com/TWAR
3:16
Its very hard to recommend it though, honestly.  It's actually unperformed in the few months its been launched (vs the global equity market it fishes from).  It hasn't really moved off of its initial 2.5m dollars it launched with.
To say nothing of being 0.81%.  Which is pretty darned expensive.
3:17
So I'd love to be wrong -- I generally route for success -- but I'm not sure it's going to hit the mark.
Dawn Petre
3:17
I assume SPY is the main ETF through which investors can get exposure to the S&P 500. What are some others?
Dave Nadig
3:17
Hi Dawn.  So we have three horses in that race.  SPY is the "traders fave" because it's literally the most liquid security in the world.
It has two big competitors: IVV and VOO from iShares and Vanguard respectively
3:18
The latter are both cheaper (IVV is 4bps, VOO is 3bps)
vs 9 for spy
and SPY has a tiny amount of cash drag which costs it another bps or two in up markets (because of it's structure).
3:19
I suppose I should mention that if you truly wanted the CHEAPEST exposure to large cap US, the Salt Low Beta fund, (LSLT) is under waiver, which makes it technically free.
but thats a twist, not pure exposure.
Karl
3:19
I'm new to ETFs. When is the annual expense ratio collected? Day of purchase and then every year on that date? Does it show up on a brokerage account statement?
Dave Nadig
3:19
GREAT question!!!
3:20
So, every night, the ETF (and every mutual fund) calculates a Net Asset Value.
In that calculation, any accounting accruals for expenses (or income!) are included.  So 1-days fee is accrued against the books of the fund.
When the check is actually cut from the fund to the advisor is actually irrelevant, because the liability is booked and it comes out of the NAV calculation every day.
3:21
That NAV acts as the "peg" around which any trading in the open market will happen, so it's a known drag, which the market makers and APs know about in advance, so they put it into their hedging calculations as well.
so as an individual investor in any fund or any ETF, any expenses are taken out before the value of your position is even reported - you don't need to worry about it at all.
John
3:22
I saw Innovator ETFs filed for a patent on their Defined Outcome ETFs... do you see this becoming more of a trend in the ETF market for smaller independent firms to protect Intellectual Capital against some of the larger players?
Dave Nadig
3:22
I'm generally not a BIG fan of financial/process patents, because they rarely seem to cross that "aha!" threshold of "non-obviousness" which patent law is based around.
3:23
But, I live in my own bubble, for sure, and by all means, people and firms should use the system to their maximum advantage.
Historically, things like index methodologies have been treated more as copyright issues, not patent issues.  Usually its structural processes which get patented.
I haven't waded through the entirety of theirs, but I'm curious if it will hold up...
Lois Gregson
3:23
Thank you for sharing thoughts from Camp Kotok, it's always an interesting piece.  Based on your experiences there, what has changed the most about the "event"?  Can you speak to the demographics?  Thanks.
Dave Nadig
3:23
Hi Lois!
3:24
So, the Kotok invitations are run by David Kotok, as you can imagine.
and he curates a pretty diverse group.
3:25
It changes a little bit each year as people drop off and he reaches into the (enormous) wait list.  It's capped based on the number of camp-mattresses on site, which is about 50.
But it's roughly 40% women, if I had to guess, and has a smattering of other diversity metrics in it.  It's a bit less "old white americans" than an average finance conference, which is nice.
3:26
its VERY diverse philosophically, and I am 100% thats by intention.
Not just economic philosophy, but politically as well.
As for what's changed... mostly just the outside world.  It was very different in August 2016 than it was this year.  I made some comments about that in my piece here:
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