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Dave Nadig
1:59
Good afternoon, and welcome back to ETF.com Live!
2:00
As always, you can submit questions in the box below, and I'll get to as many as I can in the next 30 minutes, give or take.
We'll have a transcript up shortly after the session, in case you have to hop out.
With that, let's get started.
Marv
2:00
Just wanted to thank you for conducting your webinars on ETFs. Saw the one yesterday on defined outcome funds. I find them really informative.
Dave Nadig
2:01
Your very kind.  I do like doing the webinars on camera, I think it makes it more lively.  For anyone who missed it, you can watch replays on our site pretty easily here:
Replay of that one will be up in a few days.
John
2:01
why do I not have ETF choices in my company's 401(k) choices?... not asking you to speak for the company but I think that's the case for a lot of people's 401ks
Dave Nadig
2:02
Well, there are a few reasons for this.  Probably the biggest is that historically, you couldn't buy fractional shares of an ETF.
So if you're contribution was $300 for a given paycheck, splitting that across 3-4 ETFs would be quite hard, without it being very innacurate.
Second, historically, there were commissions involved.
2:03
Both of those are starting to crack open: commissions have largely disappeared, and Schwab at least is talking fractional share trading.
But the third big reason is money.  Most mutual funds in 401(k) plans have 12(b)1 fees.  Those fees are used to pay for the record-keeping and other expenses of the 401k plan itself.
2:04
If you replaced all those 50-100bps mutual funds with 10bps ETFs, well, someone's gonna have to pay.
THis isn't totally the reason of course -- many plans have very cheap index funds in them (and in general, those will be a great choice for folks).
And it's not just you: I've NEVER had a 401k that had ETFs in it.  It's exceptionally rare.
2:05
I do think it will change over time.  But don't dis a good cheap index mutual fund.  THey get the job done too!
Amani
2:05
Hi. I am a day trader and I want to attend the conference in Florida
Dave Nadig
2:05
Hi Amani!  You totally should.  It's a great event.  I should point out that ETF.com no longer actually runs the event in anyway (InsideETFs in Hollywood Florida, coming superbowl weekend).
2:06
But we pretty much all attend, and it has become a real anchor point of the year for the ETF industry.  I think any investor would find a lot to learn there.  The sessions are great.
I know I always learn a TON.
Drew Fallon
2:06
Hi Dave. Has “smart beta” been trumped for some new investing “trend”? Like non-transparent ETFs, or …?
Dave Nadig
2:07
Heh.  Well, Smart Beta flows have been pretty good, actually, so I wouldn't say its gone by the wayside.  I don't consider it a fad, i just consider it a new label for Quant and Factor investing, which have been huge for decades.
You could probably say, from a pure headlines perspective, that ESG (or bitcoin, or cannabis) took some of the column inches away.
2:08
I DO think 2020 will be the year we talk a lot more about active, though.  So maybe not yet, but it's coming.
Brynne M.
2:08
So much discussion re whether or not this bull market has more room to run. Your thoughts?
Dave Nadig
2:08
While I don't advocate market timing, I think it's reasonable to ask once in a while "how the markets are" if you're thinking about new allocations.  I tend to be pretty simple in these things, I really focus on two buckets.
2:09
Valuation, for which I generally look at the CAPE ratio.  It's sitting about the highest it's ever been, but for the dotcom boom
here's a good chart:
and a link:
So that says we're pretty fully valued.
and then broad econ data which has honestly been mixed.
Everytime I tweet something economic I get accused of being political, but I'm just looking at numbers.  We seem very thin on good econ data.
2:11
Yes, the consumer remains super strong given everything else, and BLS numbers continue to look good.
but manufacturing and a dozen other data points are weak, so ....
im cautious here.
Suze
2:11
This year more than half of ETF inflows went into bond ETFs. Is this the first year that’s happened? Why now, what’s different?
Dave Nadig
2:12
I'd need to double check, but it sure feels like the strongest bond flows I can recall in the past decade.
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