ETF Zoo: Stunning Performances in Silver, EM, and Small-Caps
It's been a chaotic and wild ride in markets already this year. This episode of ETF Zoo covers the massive rotation in EM, structural volatility in silver, and the new, surprising home of small-caps these days.
Welcome to ETF Zoo, where we check in on the latest happenings in the wild world of ETFs. In this episode, the group digs into the shocking performance happening in emerging markets and the rapid collapse of silver prices in the largest single day drawdown in modern history. The team also checks in on the ETF fee war and how active fits into the trend, as well as the ongoing "spaghetti cannon" of filings with the SEC.
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 Elisabeth Kashner, CFA, Director of Global Research Funds at FactSet.
Topics Covered
Emerging Markets Rotation: There has been a significant and broad rotation of capital into Emerging Market ETFs, with nearly 70% of these funds seeing inflows as investors bet on their growth potential over domestic equities.
Active Management Fee Wars: The industry is seeing a beta adjustment with active managers lowering fees to compete with passive core strategies, fueled by a massive shift of assets from high-cost mutual funds into lower-cost ETFs.
Silver Market Volatility: A massive sell-off in silver was magnified by leveraged ETF rebalancing, which had to sell approximately $3 billion worth of silver to maintain its leverage ratio during a price drawdown.
Small-Cap vs. Large-Cap Performance: While small-cap value ETFs have hit highs, they continue to struggle to keep pace with large-cap indices like the S&P 500. Compounding things further, benchmark small-cap indices are arguably no longer the place to find up-and-coming small-cap businesses poised to break out.
SEC Filing Spaghetti Cannon Continues: The SEC continues to receive a broad range of filings from ETF issuers, including another recent attempt at a 4x leveraged fund as well as single-stock autocallables.
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