ETF Wrap: Crypto Edition – MarketWatch

Is it the wave of vaccinations, the recent spring break, or the first breath of warm air that makes it seem like “we’re born again, there’s new grass in the field,” as John Fogerty put it? We all have cabin fever, and not just because it’s been a long winter. The months since COVID-19 was first declared a global pandemic until now have been an eternity.

In the land of ETFs, it’s been a long wait for a bitcoin fund, but there could be one on the horizon. The same may not be true of rising rates – retirees and other income seekers may have to wait longer. This week, we cover both topics: how some of the industry heavyweights are thinking about cryptocurrencies, and how to fix the revenue problem.

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Universal Collection / Courtesy Everett

May next week bring you nothing but sunshine and home runs, and thanks for reading. Get us on, coach, we’re ready to play Bitcoin. Spring fever is in the air, and as long-suffering fans (fill in the blank), the ETF industry is united behind one simple vote – this is our year. (Here’s a previous Wrap coverage on why industry participants think that a more open-minded SEC will finally clear the way for a BTCUSD bitcoin, + 2.76% ETF sometime in 2021, and, for their baseball breaks. fantasy, a recent financial Twitter, uh, armchair quarterback on the subject. On Wednesday, MarketWatch and Barron’s convened a group of crypto industry participants to discuss the asset class landscape (the second part will take place on April 14.) One session focused on “the illusory bitcoin ETF,” and featured Jan van Eck of VanEck and Som Seif of Purpose Investments. Not surprisingly, both men had strong opinions on the advantages that a bitcoin ETF would bring to US investors. ETFs have proven to be the most efficient way for investors to expose themselves to different assets, Seif noted, particularly those that historically e have been less easy to access, like gold. Van Eck agreed. ETFs bring price competition to markets, just as they did for gold, he said, in addition to transparency, tax reporting and more efficiency in trading. Both panelists said they believe that bitcoin’s volatility will decrease as access increases. Noting the flood of recent requests to launch funds, they both acknowledged that it is unclear how many different ETPs the market could absorb. Even if the SEC approves several different applications, investors will pick winners and losers. Fees attract a lot of attention in the ETF space, Seif said, but “strategy is more important,” and strategy becomes important in a fund landscape that involves putting a digital asset in a “traditional finance” envelope. Read: Blockchain Company LBRY Attempts To Unite Industry Against SEC; Critics allege that a ‘cryptocurrency suppression program’ agreed Van Eck, calling bitcoin “revolutionary” for finance, in part because it involves instant settlement and 24/7 trading. “Execution and mechanics are in baseball, but it’s important to get it right,” he said. Coinbase’s public offering will also help mature and legitimize cryptocurrencies in the financial services world, the two men agreed. Read: “It’s no fun” being a little fund manager most of the time, says Jan van Eck, but now he’s an exception. Publicly Traded Sundries Vanguard has launched its first actively managed bond ETF. The Vanguard Ultra-Short Bond ETF VUSB, -0.01% “offers a low-cost diversified option for investors seeking income and limited price volatility,” the company said in a statement. “An ultrashort strategy bridges the gap between money market funds that offer a stable share price and short-term bond funds, which are intended for longer investment time horizons.” The fund has an expense ratio of 0.10%, compared to the 0.22% average for the category. In early April, research heavyweight Morningstar drew attention for his critical views on ETF manager Cathie Wood and her flagship fund, ARK Innovation ETF. Soon after, MarketWatch posted some insights from a research competitor, CFRA, which could be called a “glass half full” look at how ETF stores and their funds are managed. Speaking of CFRA, Wrap readers may recall an unofficial bet between its head of research, Todd Rosenbluth, and ETF pioneer Dave Nadig on the best ways to play a big infrastructure bill with ETFs. Rosenbluth’s pick, Global X US Infrastructure Development ETF PAVE, -0.62%, is now up 18.4% year-to-date, while Nadig, the FlexShares STOXX Global Broad Infrastructure Index Fund NFRA, -0 , 01%, has resulted in a 5.8% return. Read: Biden Launches $ 2.3 Trillion Infrastructure Plan: ‘It’s Bold, Yes, And We Can Do It’ Read: Here Are ETFs To Help You Invest In Biden’s Infrastructure Plan Is There An ETF For That? Dividends are back. The companies collectively increased their payments by $ 20.3 billion, the largest quarterly increase since the first quarter of 2012, according to data from S&P Dow Jones Indices. For income-dependent investors, this is good news. For one thing, it comes when bond yields seem to be taking a breather after lurching up during the first quarter. Dividends certainly don’t pay much, but they are still more than bonds: The average was 2.48% in the first quarter, according to the S&P Dow Jones Indices report, compared to a recent return of 1.64% on the 10-year US Treasury Note TMUBMUSD10Y, 1.651%. Wrap has previously profiled “aristocratic” dividend ETFs, those that include companies that not only pay a dividend, but constantly increase it. These aren’t fast-growing stocks, for obvious reasons: They’ve been increasing their quarterly payments for longer than some high-tech CEOs have been alive. The ProShares S&P 500 Dividend Aristocrats NOBL ETF, -0.17% may still be king, but there are other ways to play the matter. The ProShares S&P MidCap 400 Dividend Aristocrats REGL ETF, -0.18%, targets mid-caps such as Williams Sonoma Inc. WSM, + 3.03% and UMB Financial Corp UMBF, -0.99%. It offers a distribution yield of 3.28%, according to the fund’s website, compared to 2.69% for NOBL. The Schwab US Dividend Equity ETF SCHD, -0.16% offers a distribution yield of 3.01%. It has a very different composition than NOBL: higher weighting of finances, less assigned to materials, for example. Visual of the week

Source: Morgan Stanley

Weekly Rap Last Week’s Top 5 Winners ETFMG Prime Junior Silver Miners ETF SILJ, + 2.70% 11.6% Invesco DWA Technology Momentum ETF PTF, + 1.55% 10.6% NorthShore Global Uranium Mining ETF URNM, + 0.66% 10.3% VanEck vectors Junior Gold Miners ETF GDXJ, + 2.59% 10% iShares MSCI Global Silver Miners ETF SLVP, + 2.75% 10% Source: FactSet, as of close of business Wednesday, April 7, excluding ETNs and leveraged products Top 5 losers from last week United States Natural LP Gas Fund UNG, + 0.17% -6.2% Invesco DB Energy Fund DBE, -0.72% -5.3% Franklin FTSE Russia ETF FLRU, + 0.15% -3, 1% Global X MSCI China Utilities ETF CHIU, + 0.24% -2.8% Nifty India Financials ETF INDF, -0.48% -2.3% Source: FactSet, until close of business Wednesday, April 7 , excluding ETNs and leveraged products MarketWatch has launched ETF Wrap, a weekly newsletter that gives you everything you need to know about the exchange – traded sector: debuts d e new funds, how to use ETFs to express an investment idea, regulations and indu Try changes, inflows and returns, and more. Sign up at this link to have it delivered directly to your inbox every Thursday.