On this week’s episode of ETF Prime, host Nate Geraci is looking back at some of his favorite conversations of the year. This includes his time spent speaking with Research Affiliates’ Rob Arnott, investing legend Burton Malkiel, Interactive Brokers’ Thomas Peterffy, Simplify ETFs’ Harley Bassman, Guinness Atkinson’s Jim Atkinson, ProShares’ Simeon Hyman, and BlackRock’s Armando Senra.
With no shortage of exciting topics coming out of the ETF industry this year, Geraci offers snippets from seven different conversations for his latest comprehensive “Best Of” episode.
The first half of the show is more market-driven, focusing on meme stocks, crypto, inflation, and more of the wild events that occurred on the market. The second half focuses on some of the biggest ETF stories from 2021.
Best of the Market News
First up is Research Affiliates’ Rob Arnott, in a conversation that took place right after the meme stock phenomenon went mainstream with the explosive run-up in GameStop’s stock prices. Keep in mind, this whole situation still hasn’t exactly died down, which is something that Arnott had predicted in this conversation.
Next up is noted financial figure Burton Malkiel, the founding father of passive investing. He also weighed in on meme stocks, as well as stock valuations and crypto. Malkiel had a lot to say on how to reconcile the wild swings in meme stocks with the efficient market hypothesis. He also discussed ESG and how the pandemic has changed the financial markets.
Highlights are also included from a conversation with Thomas Peterffy, founder and chairman of Interactive Brokers, who came on the show to discuss payment for order flow, a practice where brokerages receive kickbacks from market makers paying brokerages to execute retail trade orders, after which the market makers can keep the spread. This has led to increased discussion, including from regulators, on whether apps like Robinhood are financially incentivized to get people to trade more.
Geraci also revisits a conversation had with Simplify ETFs’ Harley Bassman on income and how to find it. Beyond the wild stock market gyrations, 2021 has been characterized by discussion regarding the death of the 60/40 portfolio, specifically the “40” that refers to the bond portion. Bassman weighed in on the potential for rising interest rates and inflation, the role of the Fed, and where advisors can find income right now.
Best of the ETF Biz
One of the biggest ETF stories of the year has been the number of mutual funds converting to ETFs, highlighted by Dimensional Fund Advisors converting $30 billion in mutual funds to ETFs. So kicking off the second half of this podcast is a conversation with the mind behind the first-ever mutual fund to ETF conversion, Guinness Atkinson’s CEO, Jim Atkinson. He explained why he pursued this process, the mechanics behind the conversion, and the implications for the industry.
Next up is ProShares’ Simeon Hyman, offering, of course, his thoughts on another huge bit of ETF news from 2021: the launch of the first bitcoin futures ETF. In the days after launch, Hyman had jumped on ETF Prime to discuss BITO. It was a buzzy day, and this conversation was all about the build-up to the event, what the reaction was, and what to expect going forward.
Finally, BlackRock’s Armando Senra joined Geraci in August to deliver the annual ETF State of the Union, an annual fixture of the podcast. With all of the comments surrounding ETF growth and innovation, Senra offeed plenty of insight into the potential future of ETFs.
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