Should you consider dumping your boring indexed ETF and do direct indexing?

FRI, SEP 10, 2021

YOUR WEEKLY UPDATE ON TOP ETF TRENDS

A NOTE FROM BOB

Direct indexing is attracting attention as a new form of investing. When you own an S&P 500 ETF, you have indirect ownership of the stocks in that index. You can't vote in shareholder meetings, nor can you buy or sell the underlying stocks. With direct indexing you own the stocks in the index directly. You can customize what you own any way you want... by sector, by investment style. And you can do tax loss harvesting, selling the losers and using the loss to reduce your tax liability. Should you consider dumping your boring indexed ETF and do direct indexing? Join us Monday at 1 PM ET on ETF Edge when our guests will be Patrick O'Shaughnessy of O'Shaughnessy Asset Management, and Dave Nadig, Director of Research at ETF Trends.

Money pours into China ETFs. Despite the worry about investing in China, money keeps going in. Why? The funds are now cheap. Value investors who have little interest in ideology are putting money to work. KraneShares CSI China Internet ETF (KWE), which has been cut in half in the last six months, has seen notable inflows since dropping big in July.

Meanwhile, it's getting ugly in the debate over China. George Soros has called out Blackrock for launching a set of mutual funds and other investment products for Chinese consumers. BlackRock has also recommended that investors triple their allocations in Chinese assets. "The BlackRock initiative imperils the national security interests of the U.S. and other democracies because the money invested in China will help prop up President Xi's regime, which is repressive at home and aggressive abroad," Soros wrote in an op-ed in the WSJ. "Pouring billions of dollars into China now is a tragic mistake. It is likely to lose money for BlackRock's clients and, more important, will damage the national security interests of the U.S. and other democracies."

Another fund family gets into ETFs. Capital Group, which has $2.5 trillion in assets and runs the American Funds series of mutual funds, is getting into the ETF business. It plans to launch a batch of ETFs by the end of the first quarter of 2022.

For more analysis and actionable insights, catch me live on Mondays at 1 PM ET on ETF Edge.