ETF Zoo: Gold, the Oil Trade, and Taxes
The ETF Zoo crew breaks down everything from physical gold price movements to what's happening in ETFs in the liquid gold space, including the under-the-radar ETF with the best performance year-to-date.
Welcome to ETF Zoo, where we check in on the latest happenings in the wild world of ETFs. The crew this week explores the surge in international flows and if $2 trillion is still on the table, the merits and myths of gold as a hedge, action in oil ETFs—including tanker shipping—and the growing dominance of active ETFs as well as regulatory action on ETF taxation.
ETF.com hosts Dave Nadig, President & Director of Research, and Sumit Roy, Senior ETF Analyst, are joined this week by Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, and Kirsten Chang, Senior Industry Analyst at TMX VettaFi.
Topics Covered
- Checking in on Flows and Predictions: The group discusses the massive influx of capital into ETFs, noting that nearly half a trillion dollars has already moved into the market this year. There is significant debate over whether the industry will hit a record $2 trillion in annual flows, driven largely by a class of legacy asset managers finally embracing the ETF structure. If you want more Q1 analysis, don't miss Dave Nadig's breakdown here.
- International vs. U.S. Equity: The rotation towards international equity continues, entering its 11th straight month of inflows and is currently pulling in twice the capital of U.S. equity ETFs. Is this a move by investors trying to tackle U.S. concentrations? Eric Balchunas discusses individual country investing and the larger implications.
- Gold as a Non-Correlated Asset: Recent market activity has been a sharp reminder for investors that gold doesn't function as a traditional hedge but instead remains a zero-correlated asset to stocks. As more investors embrace this reality, will it change how they use gold in their portfolios?
- Shipping and Oil Volatility: Sumit Roy discusses the top performing ETF, the Breakwave Tanker Shipping ETF (BWET), this year that's riding high on skyrocketing tanker freight futures caused by conflict in the Middle East. However, this is a complex, high-risk trade, and traditional investors should stick to more straightforward energy plays.
- Active Management and Industry Consolidation: A significant portion of new ETF launches and flows are now actively managed rather than passive. This shift is driving industry consolidation, though Kirsten Chang notes that modern mergers are becoming more methodical—focused on acquiring specific tech or specialized narratives—rather than just seeking scale through legacy mutual fund businesses.
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