etf.com’s Post

🗣️ Calling all mutual fund owners: If you buy active mutual fund investments in taxable accounts, you should consider substituting those investments with active ETFs. As Bob Elliott highlights below, active ETFs are generally lower cost and more tax-efficient than their mutual fund peers.

Assets in actively managed ETFs surged 37% in 2023, surpassing passive ETF growth and appealing to advisors for their ease of use compared to mutual funds. https://lnkd.in/gXwcN6U4

Covered call ETFs may be a shitburger when compared to hyper-efficient equity index ETFs... but what about bond ETFs? Tomorrow's blog: https://lnkd.in/gW2ZpTGs I was in Chicago last week for the CBOE RMC discussions. Most covered call ETF vendors positioned their funds as tax-efficient and a worthy replacement for the bond slice of the age-old 60/40 allocation mix. I raised an eyebrow at the tax-efficient bit, but this turns out to be a matter of positioning and comparison. Versus equity index ETFs, covered calls are not tax-efficienct. But what about versus bonds? In this week's blog, I take a closer look, and consider something more profound along the way... Do we need bonds? --- blog.taxalphainsider.com for all things taxable portfolio management

While actively managed strategies have gained appeal during times of economic stress and market downturns when it's easiest to justify disembarking from the market performance train, the trend for the past few months has seen investors piling into active ETFs despite the solid performance from passive indexes. According to a report from State Street Global Advisors, global stock indexes gained 7.8% over the past three months, marking the best first-quarter performance since 2019 and the second-best first-quarter gain in a decade. At the same time the market was lifting all those low-cost index ETFs to new levels, investors and financial advisors have been pouring money into active ETFs, including a record $26 billion in March that contributed to the record $64 billion in the first quarter, according to the report. To put these inflows in context, consider that in 2024 active ETFs have accounted for 32% of all ETF inflows, which is the highest rate ever, despite representing just 7% of all ETF assets, State Street said. https://lnkd.in/gBfY-djc #etfs #exchangetradedfunds #mutualfunds

It’s unreasonable to expect ETFs to have zero/low market impact when the individual stocks they’re composed of themselves exhibit the “self-inflated returns” that Jason Zweig refers to. Unbalanced order flow reflects shifting investor expectations and will move prices in an efficient market to reflect new information. The real question is which fund structure is best equipped to dampen excessive volatility/bubbles: Is it open-ended mutual funds, closed-end/unit trusts, or ETFs? With creation and redemption, I believe ETFs are best structured to keep individual securities’ prices closest to their fundamental values and therefore produce efficient pricing of the ETF. Eliminating price swings is not a goal of market structure, but swift price adjustment to reflect new information is.

"I’m excited to share my latest article on ETF Central: 'Exploring the Nuanced Dynamics of AP Selection for ETF Issuers.' This piece delves into the complexities of selecting the right Authorized Participants, a crucial decision that impacts an ETF’s market performance and operational efficiency. It's an in-depth look at how AP capabilities, costs, and strategic relationships shape the ETF landscape. Check out the article for a comprehensive understanding of the vital roles APs play in the ETF ecosystem. #ETF #CapitalMarkets #ETFCapitalMarketsAdvisorsLLC #MarketMakers #InvestmentStrategy" https://lnkd.in/eqtV628w

HULL TACTICAL US ETF Hull Tactical ETF offers an innovative, simplified approach to delivering risk-hedged exposure to the S&P 500. HTUS’ objective is to provide exposure to the long-term appreciation of the equity market regardless of the direction of the broader market. The fund employs a disciplined process to evaluate indicators of market performance, anticipate market direction, and appropriately position the portfolio. Hull utilizes levered* futures to establish both long and short positions. In addition, the fund will buy and sell (write) put and call options on individual U.S. equity securities or securities indices. WHY HTUS – Exposure to potential equity market appreciation. – Looks to avoid and potentially profit from market downturns. For those of you who missed our informative webinar on HULL TACTICAL US ETF PLEASE CLICK ON THE LINK below!!!!! https://lnkd.in/eFH5icrz

How Investors End-Up Chasing Their Own Impact: Self-Inflated Returns Are 'Ponzi Flows' ... When billions of dollars gush into an ETF that just reported big gains, more gains can soon follow. The problem: The investors themselves are driving those gains - and will suffer when their impact fades. ... What your exchange-traded fund owns is important. Who else owns your ETF might be even more important. That’s because a fund’s returns often don’t depend merely on the behavior of the investments it buys, but also on the behavior of the investors who buy the fund. ... Over the years, many portfolio managers have indicated that large inflows at a fund that concentrates on smaller, less-liquid stocks can drive prices up if the fund’s buying constitutes much of the typical daily volume in those stocks. article review at - https://lnkd.in/dXtsYC5h ... when allocating capital across funds, investors are unable to identify whether realized returns are self-inflated or fundamental ... this has important implications for asset markets ... among ETFs alone, $500 Million dollars are reallocated DAILY because market participants chase the price impact of past flow-driven trades ... these 'ponzi flows' predict bubbles in ETFs and their subsequent crashes ... we provide a simple regulatory reporting measure – fund illiquidity – which captures a fund’s potential for self-inflated returns ... underlying drivers of this feedback loop – return chasing and price impact – apply more generally ... trend following in futures markets and the $300 Billion wide CTA industry, are likely prone to self-inflated price spirals ... similarly, the 'quant crunch' in 2007 and other deleveraging spirals can be seen as outcomes of the interaction between return chasing and price impact full study at - https://lnkd.in/dsbC-pU6

While they can be actively or passively managed by fund managers, most ETFs are passive investments pegged to the performance of a particular index. Mutual funds come in both active and indexed varieties, but most are actively managed. With a mutual fund, you buy and sell based on dollars, not market price or shares. And you can specify any dollar amount you want—down to the penny or as a nice round figure, like $3,000. With an ETF, you buy and sell based on market price—and you can only trade full shares. Mutual funds are available for different investment strategies, risk tolerance levels, and asset types. ETFs can be limiting as they are mostly passively managed indexed funds that invest in the same securities and mirror the chosen index #ETFinvesting #mutualfunds

Excited to share our latest blog post on ETF tracking error screener for June 2024. This post introduces an insightful screener based on tracking errors and differences, providing valuable insights for evaluating the efficiency of ETFs in tracking their benchmarks. With coverage of 70-plus ETFs, it's a must-read for investors and professionals in the ETF space. Check out the full post here: https://lnkd.in/gGcMSCvJ