On this week’s episode of ETF Prime, it is time to hear all about the annual ETF State of the Union from Head of iShares Americas at BlackRock, Armando Senra. But first, host Nate Geraci is joined by ETF Trends CIO and Director of Research, Dave Nadig, to recap Camp Kotok. Later on, Toroso’s David Dziekanski puts his focus on two SoFi ETFs.
In the ETF State of the Union, Senra discusses how things are going in the ETF industry and where we’re headed, including insight into the current opportunities, challenges, misconceptions, and more. As President of the iShares board, Senra has a lot to cover, from record ETF flows, ESG, active ETFs, and thematics.
First up, however, Nadig speaks with Geraci about Camp Kotok (which took place in Maine), where some of the smartest economic minds gathered to discuss the industry from various angles over wine and fishing excursions. Nadig explains in detail the nature of this Cumberland Advisors-sponsored event.
Surrounded by a diverse crowd of economists, Nadig walked away with plenty of highlights. A key topic of conversation was the effect of COVID-19, discussion over which ranged from the science behind the virus to trying to understand what the economic future will look like.
Nadig states that, “What I walked away with was how little we know and how little we can predict with any confidence about the longer-term impacts of this event that we’re still going through.”
A New World Trajectory
However, Nadig does believe it’s a fat-tailed world, and he can see the market heading both up and down. His greatest focus is labor: Most of the unknowns about the global economy come down to the human impact of this virus, which brings into focus matters such as labor availability in the healthcare field.
“There are narrow pockets like healthcare where you can say there’s going to be a labor reset, if nothing else, and possibly sustained labor inflation,” Nadig notes.
As far as the longer-term implications for labor and the working-from-home effect, Nadig explains how the big question now comes down to whether there will be a reset or sustained inflation. But we can only see in reverse, years down the line, what the actual effect was and where things took a turn.
Keeping that in mind, if labor were to go on an extended tear of repricing throughout the global economy, the implications could be greater than a one-time reset in the labor market. Both would be great from an income and a quality perspective.
Still, while these are positives, Nadig also cautions: “We need to be careful of those pockets where we’re going to have problems for a sustained period of time. Global shipping, healthcare – these are places where we’ve got long-term impacts that are not just going to bubble through in a month or two. It may happen in a year or two, but they’re not coming real quick.”
Later in the show, Geraci spoke with Toroso Portfolio Manager David Dziekanski about the SoFi lineup of ETFs. In particular, this discussion focused on the SoFi Social 50 ETF (SFYF), which holds the 50 most popular stocks on the SoFi platform. The rise of the retail trader and social investing has been big for 2021, which plays well with SFYF.
The other fund is the SoFi Gig Economy ETF (GIGE), which holds onto companies that have really benefited from on-demand workers who are leveraging digital platforms. This has, of course, experienced a shift given the pandemic.
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