Night trading? There's an ETF for that

FRI, JUL 01, 2022

YOUR WEEKLY UPDATE ON TOP ETF TRENDS

A NOTE FROM BOB

Mixed signals from the macroeconomic picture are painting a confusing narrative for inflation. Are we seeing inflation start to peak or aren't we? Housing prices are finally cooling, but auto, rent and consumer prices are still sizzling – with no sign of any relief at the pump in sight. Many are looking to the commodities complex for a better sense of what's happening. The Invesco DB Base Metals Fund (DBB) has fallen to a 52-week low – and the price of industrial metals like copper and aluminum have come way down. Is this a hopeful sign for the bulls? Join us Wednesday on ETF Edge, when we talk to Will Rhind, CEO of GraniteShares, Todd Rosenbluth, Head of Research at VettaFi and Michael Sonnenshein, CEO of Grayscale Investments. All ahead on ETFEdge.CNBC.com.

It's no surprise: The SEC on Wednesday rejected Grayscale's application to turn its GBTC vehicle into an ETF. Grayscale filed a petition challenging the decision with the U.S. Court of Appeals for the District of Columbia Circuit. They are arguing that the SEC has already approved bitcoin futures ETFs, and it is inconsistent to deny a pure-play bitcoin ETF, but the SEC has already said the two are in different markets.

Night trading? There's an ETF for that. One of the marvels of modern investing is the ability of Exchange Traded Funds (ETFs) to exploit virtually any investment fad that comes along. In the last ten years, we have seen cannabis, crypto, thematic tech, and clean energy. We have ETFs for space exploration (UFO), livestock (COW), and Millennials (MILN). Recently we have a climate disaster ETF (FEMA). This week, we have a night trading ETF in the latest niche ETF products. NightShares, a new entrant to the ETF space, is today launching its first two ETFs: the NightShares 500 ETF (NSPY) and the NightShares 2000 ETF (NIWM). According to the press release, these ETFs seek to capture value from the "Night Effect," a phenomenon whereby overnight markets have historically outperformed the daytime trading session on a risk-adjusted basis. The NightShares 500 ETF seeks to return the night performance of a portfolio of 500 large cap U.S. companies. The NightShares 2000 ETF seeks to return the night performance of a portfolio of 2000 small cap U.S. companies. It's led by Bruce Lavine, a respected industry veteran formerly at Wisdom Tree. "An extensive body of research over many years has shown that investors frequently benefit from avoiding the volatile day sessions and investing in the period between market close and market open," the company's website claims. Maybe, but there is also literature about how thin after hours trading can be, and about wider bid-ask spreads. Be interesting to watch this one

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