I love factor investing and ETFs provide a great way to get factor exposure without having to do it yourself in a systematic way of buying hundreds of securities. You can get that exposure now for under 20 basis points, which used to be something you could only get in a high cost hedge fund. Smart beta is sort of like active AI because they take something that used to be done by an active manager at the charge 1%. It's almost like they've taken Peter Lynch's brain and put it into R2 D2. That's the best metaphor I could come up with.
IN THIS EPISODE, YOU’LL LEARN:
08:42 - How index funds affect the underlying companies’ stock prices.
21:31 - What single-stock ETFs are, what investors should know about these products.
24:11 - Are inverse ETFs a good way to bet against the market?
24:11 - The risks of using leveraged ETFs and why they may not perform as you expect.
29:17 - Why passive indexing is sometimes viewed as “weak hands” or “dumb money”.
36:34 - Are we in a passive indexing bubble?
48:53 - Eric’s thoughts on Cathie Wood’s criticisms of ETFs calling them a “misallocation of capital”.
50:54 - Is now the worst time to be a passive index investor?
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
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