ETF Wrap: Portnoy complaint and emerging markets alpha

ETF Wrap: Dude, where are my returns?

One of the enduring quirks of the 2020-21 coronavirus period may lie in how it unleashed our collective inner Kardashian. Even as the closures forced the acceleration of trends like working from home and holding video meetings, they also seem to have remade American life as a giant Truman show. Our living rooms and offices became televisions and were criticized, sometimes mercilessly. Our kids, dogs, and private parts were shared too much. Our kitchens mimicked reality shows and our driveways turned into marathons.

Now our penchant for performing arts is rebuilding finances. Dave Portnoy spent much of 2020 organizing a gang of bored Americans to trade stocks as a social pastime, in public. Robinhood gets a lot of attention, but it‘s just the plumbing. Most importantly, the financial markets have now become not only the game of high school football, but the cafeteria as well. Sportos, motorheads, geeks, sluts, bloods, waistoids, dweebies, and dickheads all adore Portnoy. That is why it is important to be attentive to your last steps. By working with VanEck to launch an ETF under the BUZZ symbol, Portnoy is making a business case for the power of social groups and media, and social media, to influence markets. We all know that’s one thing, but now it will be tested and tracked. And by creating BUZZ, Portnoy is also making a business case for the ETF model, primarily for diversification. If meme funding was developed through GameStop GME, + 4.07% was an awkward first draft, think Pets.com from dotcom bankruptcy, meme funding as developed through ETF may be more durable . Chewy, for example. All of this means it’s time to give some serious thought to what the socialization and meme-ification of finance will mean for the ETF industry in the future. A financial instrument that once seemed like a risky upstart is now one step closer to being the main attraction: the “suit,” so to speak. Thanks for reading, as always. One door closes, another reopens … As Americans sheltered at home last spring, the financial services community jumped into action, churning out lists of the stocks that were likely to benefit and launching funds based on those. ideas. More recently, publications, including MarketWatch, have posted tips on how to invest in the “reopening” economy. But a funny thing happened on the road to recovery. Even as funds like ETFMG Travel Tech ETF AWAY, -0.03% and US Global Jets ETF JETS, -0.35% soar into the sky, investors continue to reward many of the work-from-home plays. The WisdomTree Cloud Computing Fund WCLD, -0.49% has raised $ 54 million in the year to date, for example, although Direxion Work from Home ETF WFH, + 0.70% has lost $ 32 million, according to FactSet data. Many online retail ETFs are going crazy: Amplify Online Retail ETF IBUY, + 1.22% has seen $ 192 million in entries, while ProShares Online Retail ETF ONLN, + 0.98% has accumulated $ 253 million. “Many of the trends that started in 2020 are likely to persist for the rest of the year even as people get vaccinated and start venturing out,” said Todd Rosenbluth, CFRA director of mutual fund and ETF research. “I don’t think of this as one or the other. This is a situation where both trends can be successful. “Rosenbluth believes that the diversification that ETFs offer compared to individual stock selection will be very helpful to investors during the transition. For example, companies will continue to trust more on tools like Zoom in the future than before the pandemic, even if it doesn’t represent as many hangouts as it did during the shutdown, he said in an interview. That diversification may also help allay some of the concerns about the capacity of the concerns. high-flying tech companies to keep growing at the same rate, argues Rosenbluth. Yet it is surprising that despite all the ways investors can take advantage of the stay-at-home boom, there are fewer options designed to capitalize on the reopening. Stocks, such as cruise lines and restaurant chains, make up small portions of E’s portfolios. Non-thematic TFs, and few REIT ETFs have concentrations of mall stocks, possibly the type of property most likely to benefit. There are some obvious plays, of course: AWAY, which MarketWatch outlined in November, and JETS, which caught attention in 2020. Rosenbluth also likes VanEck’s ETF BJK betting stocks, such as Las Vegas Sands LVS, + 0.14 %. Another option: Invesco S&P 500 Equal Weight Consumer Discretionary ETF RCD, + 2.11%, which offers some of the largest allocations to many travel stocks among national ETFs. MarketWatch analysis shows that travel companies like Expedia Group Inc. EXPE, + 5.08% and Carnival Corp., CCL, -4.78%, as well as restaurant chains like Darden Restaurants Inc. DRI, + 2.94% make up almost a quarter part of the portfolio, while another considerable section is dedicated to complementary actions to the reopening, such as auto repair companies. Listed Sundries The first conversion of mutual funds to ETFs is scheduled for March. Guinness Atkinson Asset Management has filed with the SEC to convert two of its existing funds, the company said in a statement. “Establishing an accepted legal framework for such conversion is a milestone for the asset management industry and a positive development for funders looking to offer their clients additional ways to access their investment strategies.” Asset manager Alger launched on Monday the Alger Mid Cap 40 ETF FRTY, + 0.70%, the company’s first active ETF, to be managed by Amy Zhang, who currently manages the current Alger Small Cap Focus, Alger Mid Cap Focus and Alger Small Cap Growth. Investment funds. Zhang’s Alger Mid Cap Focus Fund returned nearly 85% in 2020 and 9.7% so far in 2021, the company said in a statement. Is there an ETF for that? How would you like a fund that invests in profitable companies (growth rates of 20% per year) that have strong corporate governance, perform well in an inflationary environment, and diversify exposure outside of the US? Learn about Nifty India Financials’ INDF ETF, + 0.26%, the first pure fund of its kind, according to co-founder Amit Anand. “Finance has long been the crown jewels of the Indian stock market,” Anand told MarketWatch. The financial sector has been the best performing sector in India for the past decade and Anand expects it to continue to perform better. India has a well-deserved reputation as an emerging market growth story, and while INDF does not explicitly compete with Chinese ETFs, many of the points in Anand’s investment case for the fund are in stark contrast to that sector. Among them: Indian banks are run by private sector firms and heavily regulated, Anand said. “Historically, their good corporate governance is the reason stock prices have risen so well.” INDF also checks an unusual ESG box. The Indian economy still has a low penetration of the financial sector throughout society, with an estimated 300 to 400 million citizens considered unbanked or underbanked. The fund also benefits from another idiosyncrasy of emerging markets: the leap from legacy technologies to adopt emerging technologies alongside the rest of the world, unhindered by the old industry. While China “has taken a very tough hand towards regulating fintech, in India it is very early,” Anand said. “Fintech is altering cash and gold and the government is very open to it.” Fintechs must use the financial system infrastructure established by banks, and banks themselves dabble in fintech offerings. ”The ETF, which launched in October, has raised about $ 5 million in assets and charges a management fee. of 75 basis points. Over the past three months, it appreciated more than 17%, easily beating both the 4.2% gain in the S&P 500 and the 8.4% increase in the ishares MSCI China MCHI ETF, + 0.46%. Okay. It’s worth noting that because the fund invests abroad, it can trade at a higher premium or discount to NAV than many ETF investors may be used to. Visual of the Week Just a visual appeal, courtesy by Visual Capitalist.

Weekly Rap Last Week’s Top 5 Winners Breakwave Dry Bulk Shipping ETF BDRY, + 6.49% 14.8% Invesco Dynamic Leisure & Entertainment ETF PEJ, + 1.36% 6.3% Global X MSCI Greece ETF GREK, + 1.38% 5.3% iShares Currency Hedged MSCI Mexico ETF HEWW, + 0.68% 4.9% Alerian MLP ETF AMLP, + 1.41% 4.9% Source: FactSet, as of close of business Wednesday March 3, excluding ETNs and leveraged products Last week’s top 5 losers ETFMG Prime Junior Silver Miners ETF SILJ, + 1.04% -9.2% iShares MSCI Global Silver Miners ETF SLVP, + 0.85% -8.6% ETFMG Treatments Tests and Advances ETFGERM -8.1% Global X Silver Miners ETF SIL, + 1.08% -6.9% Simplify Volt Fintech Disruption ETF VFIN, -1.98% -6% Source: FactSet, until close of business Wednesday March 3, excluding ETNs and leveraged products MarketWatch has launched ETF Wrap, a weekly newsletter that brings you everything need to know about the exchange traded sector: new debuts of funds, how to use ETFs to express an investment idea, regulations and Industry changes, income and performance, and more. Sign up at this link to have it delivered directly to your inbox every Thursday.