MINYANVILLE ORIGINAL We began our coverage of the 3rd annual ETF (exchange traded fund) Investing Summit, chaired by Greenhaven Fund President, Ashmead Pringle with The Role of ETFs in Asset Management Allocation. Here we continue with an overview of the panel on
ETF sector performance results as applied to all asset classes.
Members of the panel included Pringle, the chairperson of the conference; Roop Betala, CEO of Volvie Capital Management; Janet Flanders Johnston, CFA, managing partner of Madrona Partners, Inc.; and Scott Rothbort, President of Lakeview Asset Management, LLC. The moderator was Tom Conner, Partner at Reed Smith.
The panel began with Betala discussing India-focused ETFs, such as WisdomTree India's ETF
(NYSEARCA:EPI). He also cited the Investment Company Institute’s (ICI) datum
of $702,60 million in domestic equity ETFs for July 2012.
Roop mentioned that ETFs provide exposure to all investment classes. Speaking of special purpose ETFs, he adduced the curious situation of Egyptian finance during the Arab Spring, whereby the Egyptian ETFs could be traded even while Egyptian trading was closed.
Panelists discussed cap-weighted ETFs, broad-weighted ETFs, equal-weighted ETFs, etc. Many ETFs replicate or represent indices in terms of the basket of securities they include and the performance of those indices vis-à-vis the ETF were also discussed.
Flanders broached the topic of market trends and endorsed the cautiously bullish tack. She encouraged people crafting ETF portfolios to emphasize equity markets over fixed income. The "fiscal cliff" resolution at year’s end—that is, Congress’s budget proposal—will give ample cause for a bullish market, she concluded.
Betala added that ETF traders should be concerned about liquidity risk and taxation rates.
Rothbort concurred that bull markets and low interest rates were about to end (a proposal almost immediately quashed by the recent announcement of the new Fed’s deleveraging instrument QE3). Investors, he said, will embrace equity and derivatives again, trends which will be precipitated by the elections. He called for investors to get out of fixed income ETFs, but not to worry about long-term spreads in the fixed income class.
Pringle stated that fixed income rates are artificially low.
No positions in stocks mentioned.