Join us on ETF Edge this Monday at 1 PM ET when our guests will be Will Rhind, Founder and CEO of GraniteShares — along with Tom Lydon, Vice Chairman of VettaFi. Trading volumes may be light thanks to the World Cup, the holiday season and ample confusion over 2023, but don't be fooled — there's plenty of movement bubbling under the surface. We've seen some heavy action in key segments of the ETF market — and we'll tell you what they are. Next week, GraniteShares is also set to launch three new leveraged single-stock ETFs on the NASDAQ, allowing investors to place even bigger bets on widely-held names like Meta, Alibaba and Nvidia. We'll discuss why single-stock ETFs have gained such traction this year.
Join us again on Wednesday at 1 PM ET when we will discuss the outlook for ETF investing in 2023 with Katie Stockton Founder and Managing Partner Fairlead Strategies and Portfolio Manager for the Fairlead Tactical Sector ETF (TACK), and Ben Lavine, Chief financial Officer 3D/L Capital Management. ETFedge.cnbc.com!
Covered call strategies have been having a moment in 2022. The strategies look for price returns from holding securities but then get extra income by selling option premiums. Even at this late date, new launches have been occurring. The YieldMax ARKK Option Income Strategy ETF (OARK) and the YieldMax TSLA Option Income Strategy ETF (TSLY) have the same option strategies. OARK is centered around ARK Innovation ETF (ARKK), TSLY is centered around the stock of Tesla.
We've spoken often about how ETFs keep hoovering up more and more assets. This year, money continued to flow into ETFs and out of mutual funds, even in a down year for stocks and bonds. But the ETF revolution is broader than that. In the US, ETFs now account for about a third of ALL equity trading, according to a recent Blackrock report. Here's another interesting stat: most trading in ETF shares do not involve buying or selling the underlying shares. The report noted that for every $10 of ETFs traded, only $1 resulted in trading activity in the underlying securities.
Dimensional Funds keep expanding their ETF lineup. They launched two ETFs: Dimensional US Large Cap Value ETF (DFLV) and Dimensional Global Real Estate ETF (DFGR), offering marketwide REIT exposure on a market cap-weighted basis. Todd Rosenbluth, head of research at VettaFi noted "The firm has six ETFs that have net inflows of $1 billion in 2022, despite short ETF trading histories."
AI for stocks: not yet. Amusing story in Bloomberg about the ageless quest for developing computers to pick stocks, a quest that has been going on since the earliest days of computers but has picked up with the advent of more advanced artificial intelligence (AI) systems. Aaron Brown, a well-respected financial professional formerly with AQR Capital Management, looked at several AI investing platforms, including an ETF (AI Powered Equity ETF (AIEQ)) and an index (HSBC Holdings AI Powered US Equity Index (AIPEX)) and concluded: "Investors should forget looking for a Skynet or Hal 9000 to run their money at the moment." He did note that AI is making inroads into investment management as a means of processing "unstructured data" like news reports.
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