You are viewing the chat in desktop mode. Click here to switch to mobile view.
X
ETF.com Live Chat!
powered byJotCast
View Full Chat Next Page
Dave Nadig
2:59
Howdy folks, welcome back to ETF.com Live!  Probably the last one for a few weeks so we'll try and make it a good one!
As always, you can enter text in the box below any time, and I'll get to as many as I can in the next 30 minutes or so, and with any luck, record a bonus video after as well.
3:00
But enough preamble , let's get rolling.
MusicMan
3:00
Soundtrack for the day? Xmas tunes?
Dave Nadig
3:00
Not a huge Xmas music fan, so instead I'm all about the new Foo Fighters EP drop.  Great cover of an old Pink Floyd tune in the mix: https://open.spotify.com/album/1bLBDuByOPcVe9nxFTS39D
Astrid
3:00
What do you think will be the key criteria for the SEC to have clear “oversight” into ESG funds, since so many ESG factors are subjective?
Dave Nadig
3:01
I have to say, I'm a little disappointed with the SEC's initial foray here.
On the one hand, hey, great, they're looking at what's inside things.  That's a nice thing.
But there initial comments seem to just kind of ignore that there are TRILLIONS of dollars globally following SRI/ESG guidance.
3:02
So to be as dismissive as they've been, I dunno.  It's hard for me to see how they come up with any kind of comprehensive rulemaking that actually matters.
3:03
If I had to make one prediction I would suspect someday we end up with a paragraph in prospectuses or SAIs that says something like "ESG goals may not be positive to your absolute performance in all time periods" or something equally worthless.
And it will end up on page 22, and nobody will ever read it.
3:04
But I'd challenge them to even come up with a definition of what they're talking about.  That would be a good first step.  As you say, it's entirely subjectve.  Not just "so many" - they're all subjective except for maybe a few governance issues like "are you actively being sued" or "do you have felons on your board."
ESG Allocator
3:04
With NUHY (Nuveen High Yield Bond) & EMNT (Pimco Ultra-Short Bond) now available, creating a globally diversified ESG portfolio is even easier.  Although, the missing piece seems to be a comparable ETF to BNDX or IAGG for the international bond exposure.  My question is...would one of the Green Bonds ETFs- Vaneck/Ishares -be a good proxy for BNDX, at this point, since they hold mostly international bonds?
Dave Nadig
3:04
So this is a pretty complex question, honestly.
3:05
Green bonds are really quite a narrow slice of the market, and they have unique characteristics.  So it would be wrong to think you can just buy green bonds and somehow have an ESG-AGG.
Sure, you'll be MORE ESG on the scorecard, but your not getting the same mix of risks
3:06
Yes, a lot of it looks pretty familiar: Some BofA, some Merrill, some Fanie, and so on.
but the mix is nearly accidental, because it's based usually on issuance.
3:07
Among other things, the corporate side is very slim.  Which maybe you want, maybe you don't.
So by all means, dig in and do the research, but this isn't like swapping SPY for IVV, or even like swapping EEM for IEMG.  They're very different portfolios in the end.
Cleo
3:07
Hi Dave, Any specific ETF predictions for 2020?
Dave Nadig
3:08
They're not "big news" - I think we see a continued "playing defense" stance from investors, so flows and product that let people stay invested while lowering risk will be popular.
We've seen that a lot in the last six months: Min vol, dividend growth, defined outcome, and so on.
3:09
The Periodically Disclosed ETFs will get rolled out in Jan/Feb, and I suspect some will come with large assets (institutional) out of the gate.
But really, that's all I got.  I don't see anything thats SUPER exciting on the raw ETF Market front.  which is fine by me because I think it's going to be exciting enough in 2020 without some giant ETF story to worry about!!!
Bill Donahue
3:10
Dave, Happy holidays and New Year to you and your family. Lots of focus on ESG by issuers, however, the announcement of an ongoing SEC sweep exam last week likely will make some issuers pause.  In my view, most firms do a pretty good job with the G, however there is a lot of subjectivity with the E and S in terms how far down you look at it (e.g. Walmart selling guns). Europe is by far a leader in the ESG space in terms of taxonomy, disclosures, regulations, etc. Whereas the U.S. has a long way to go to catch up to them.
Dave Nadig
3:10
So, the SEC can do what it likes, but I think this ship sailed decades ago.
ESG is not NEW. It's just new to RETAIL.
3:11
As you point out, Europe is way, way over this discussion.  It's just how money is managed there, and how companies are evaluated.  It's like breathing.
So while I'm happy they're looking, I don't think it's going to have some sort of chilling effect.  SUSL isn't going anywhere.
Nate Geraci
3:12
It's always tough predicting what politicians may do, but do you think Congress will ever reconsider the tax laws (or some would say tax loopholes) around ETFs? 2019 is yet another year with minimal cap gains distributions from ETFs...
Dave Nadig
3:12
Literally the ONLY people I have ever heard discuss this are ETF nerds.
It's quite literally never come up as an area of concern in any conversation I have ever had with a regulator or a politician.
3:14
If the SEC wanted to have any input, they missed it in the ETF rule.  The only regulator actually involved on the tax side is the IRS.  So unless the SEC or someone changes the structural process (which they went out of their way NOT to do, because they recognized that clean, custom creation redemption is an overal good for investors) it just isn't going to happen.
Unless, magically, the IRS becomes a proactive rather than reactive part of the picture.
I just don't see it.  I supposed in 5 years, two administrations from now, it could be on a tax overhaul agenda
but in the next 5 years?  Nah.
Jameson Locke
3:14
Do you see zero trading fees having a positive impact on the ETF space? Perhaps more people will have an incentive to participate in the market now?
Dave Nadig
3:15
I definitively think it's a positive.
Connecting…