Exchange-traded funds are looking for a few good gamblers.
ETFs are famous for tracking simple, broadly diversified indexes cheaply, transparently and tax-efficiently, an ideal combination for long-term investors. The problem for aspiring issuers is that the market for those ETFs is dominated by the big three — BlackRock Inc., Vanguard Group and State Street Corp. — which collectively manage 82 percent of ETF assets, according to Bloomberg Intelligence. To stand out, smaller firms are turning to more complex and niche funds.
Enter Innovator Capital Management, which is expected to introduce its S&P 500 Buffer ETF on Wednesday, the third in a trilogy. The S&P 500 Power Buffer ETF and the S&P 500 Ultra Buffer ETF launched last week. The funds shield “investors” from a one-year decline of up to 9 percent, 15 percent and 30 percent, respectively, in the S&P 500 Price Return Index in exchange for a cap on the index’s return.
Continue reading “These ETFs Save Investors a Trip to the Casino”
It’s not easy being a socially conscious investor. To see why, look no further than Facebook Inc.
By any reasonable ethical standard, the social media giant doesn’t measure up. The Cambridge Analytica debacle and its aftermath revealed that Facebook is collecting far more information on its users — and even non-users — than it let on. And, as my colleague Shira Ovide pointed out, when CEO Mark Zuckerberg had the opportunity to come clean last week during two days of congressional testimony, he ducked questions about how the company operates.
Facebook’s wily ways appear to be catching up to it. According to a March 21-23 Reuters/Ipsos poll, only 41 percent of Americans “trust Facebook to obey laws that protect their personal information.” An April 8-9 SurveyMonkey/Recode poll askedrespondents which technology company they least trust with their personal information among Amazon, Apple, Facebook, Google, Lyft, Microsoft, Netflix, Tesla, Twitter, Snap and Uber, and 56 percent chose Facebook. The runner-up was Google, with just 5 percent.
Given all the questions surrounding Facebook, investors may be surprised to learn that its stock is commonly held by so-called socially responsible funds, which invest in companies deemed to be good citizens.
The biggest such exchange-traded fund — the iShares MSCI KLD 400 Social ETF, with $1 billion in assets — bills itself as an “exposure to socially responsible U.S. companies” and urges investors to use the fund to “invest based on your personal values.” The fund has a 3.5 percent allocation to Facebook.
Continue reading “Investing in Virtue Is Hard When So Few Companies Measure Up”
ETF enthusiasts gathered recently in Hollywood, Florida, for the “Inside ETFs” conference, the industry’s biggest party of the year. By many accounts it was the swankiest celebration yet.
And for good reason. When Inside ETFs first convened in 2008, ETFs managed $500 billion, or one-twentieth of the money managed by mutual funds, according to Broadridge. ETFs now oversee $3.4 trillion, or one-fifth of mutual fund assets, according Morningstar data.
Continue reading “Investors Resist Golden Age of Active ETFs”