A NOTE FROM BOB
A month from hell for China investors. The concern is that regulatory risks are much greater than investors had anticipated... risks from both China regulators seeking to rein in everything from tech to education to food delivery and U.S. regulators like SEC chair Gary Gensler who is now calling for more disclosure from Chinese firms regarding their ownership structure. After a decade where investors have increased exposure to China, many are now debating whether China should be considered a separate asset class from the U.S. and the rest of the world, that owning China on an equal market cap weighted basis is not going to be feasible. Is China still investible?
Join us Monday on ETF Edge, when our guest will be Kevin Carter, who runs the Emerging Markets Internet and Commerce ETF (EMQQ) that invests heavily in the Chinese consumer, Perth Tolle, founder of Freedom 100 Emerging Markets ETF (FRDM) that weights exposure to emerging market equities based on personal and economic freedom metrics; plus John Davi, who runs Astoria Advisors, which uses ETFs to allocate investments around the world.
SEC Chief Gary Gensler is saying he wants to look into the way funds are named. He's been concerned that funds that use names like "green" may not be all they are cracked up to be.
A bitcoin futures mutual fund has launched. The Bitcoin Strategy ProFund (BTCFX) invests in front-month futures contracts that trade on the Chicago Mercantile Exchange. The idea is to roll over the proceeds from each expiring contract into new ones for the following month. That, of course, means that this fund will not necessarily correlate with the spot price of bitcoin.
Cathie Wood isn't the only ETF provider buying the underwater Robinhood, which went public this week at $38 and sank 8% on its first day. Renaissance Capital, which runs the IPO ETF (IPO), will also be adding it to its roster within the week.
THERE IT IS: ETFs have officially broken their annual record for inflows with $500 billion and its still only July, according to CFRA Research. Big inflow into equities!
My old friend Larry Swedroe at Buckingham Strategic Wealth can always be counted on for a dose of reality. His latest missive looks at the growth of the ETF industry. I'll let him speak for himself: "Innovation in the ETF space has followed two paths: broad-based products that cater to cost-conscious investors and expensive specialized ETFs that compete for the attention of unsophisticated investors." His conclusion: "the ETF industry is great at capitalising on the naïve retail investors for investment fads...sophisticated investors can detect the overvalued segments of the market by looking at the segments in which new ETFs are launched." Ouch!
Every once in a while, there's a good introductory piece on ETFs written. Kiplinger just did one.
For more analysis and actionable insights, catch me live on Mondays at 1 PM ET on ETF Edge. KEY STORIES
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