Finally, I would like to highlight a particular interview of an ETF sponsor. Without naming names, a more esoteric ETF launched by a firm that currently has only one product (but is approaching $1 billion). This ETF is a terrific idea, designed to take advantage of future trends affecting nearly all industries. From my vantage point, the interview with the CEO was tough, to say the least. The multiple media correspondents interviewing him (three at once) struggled to understand the ETF’s construction (and would cut him off before he could finish explaining). They concluded by borderline discrediting his idea, calling it far out there and almost too futuristic.
Maybe I am being too hard on the media, but I think it is important — and becoming much more important — to recognize the differences between ETFs, what is available, and what is appropriate for individual investors who may have just retired and are spending way too much time watching financial television. Don’t get me wrong; there have been major strides made by some media outlets that have full-time ETF experts on staff (who are excellent — you know who you are). My challenge is for the media to embrace the fact that ETFs are here to stay, and instead of drumming up concerns about the structure, spend some time exploring the extensive ETF universe and covering products with the same respect given to traditional mutual funds.
Grant Engelbart is a Portfolio Manager at CLS Investments, a participant in the ETF Strategist Channel.