Hot ETF Topics From Wealth/Stack

September 10, 2019

Smart Beta? Prove It

While many folks I talked to use a value fund here or a min vol fund there, overall, there was enormous skepticism that multifactor and more esoteric single-factor funds were really that useful for their practices.

Many folks decried the lack of tools to help evaluate the claims funds are making in their “smartness” beyond the shiny rearview mirror of after-the-fact performance.

Nontransparent Active? For Who?

This was a smart, well-informed crew. Many folks knew about the forthcoming nontransparent products from Precidian, but not a lot of direct interest in specific brands they hoped to see show up.

My thinking on the demand issue for nontransparent active has changed. Over the past few weeks, I’ve heard from more and more folks who believe there’s pent-up institutional demand for a more liquid version of popular active mutual funds. I remain skeptical, but I can see the argument. There is still, after all, an enormous pile of money in actively managed mutual funds.


It’s almost inevitable (if a bit tiring) that any collection of ETF Nerds is going to involve a discussion of the continuous stream of ETF naysaying that comes from some corners of the financial press.

Whether it’s the old “indexing kills price discovery and is worse than Marxism” saw, or more legitimate concerns about just how illiquid an underlying you can put in an ETF wrapper, the cloud of misguided publicity hovered over many conversations. Luckily, these are myths that are generally pretty easy to bust.

How About Y’all?

This is the place where I point out that all of the above are the reasons exists in the first place: to help answer the hard questions, and provide the best tools we can to make better decisions. It’s what we do with our daily coverage, our education library and our Live! sessions every week.

On Wednesday, September 18, we’re going to try something new: We’re going to try and answer all these questions and more in a live webinar setting, taking your ETF due diligence conundrums and walking through how we’d approach the problem, using tools both at and elsewhere.

It’s free, there’s no sponsor or agenda, and I’m hopeful we’ll get some good hard challenges. Hope you can join us. (Register here ­- ETF 201: The Due Diligence Toolbox)

Dave Nadig can be reached at [email protected]

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