Quick Drop: Wes Gray - Talking about BOXX, creating an ETF, and more

11 snips

Mar 2, 2024

Wes Gray discusses creating the ETF $BOXX, helping others start ETFs, and why value and momentum are effective factors. The episode touches on tax efficiencies, entrepreneurship challenges, military training impact, value investing strategies, and the complexities of launching an ETF.

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INSIGHT

Box Spreads as Cash Vehicles

Box spreads enable direct lending and borrowing through options with minimal counterparty risk due to clearinghouses.
This effectively replicates Treasury bills with potentially better returns and tax profiles.

ADVICE

Using Section 351 for Tax-Deferred ETFs

Use Section 351 exchange to transfer low basis diversified property tax-free into ETFs.
Ensure no single security exceeds 24.99% and top five securities don't exceed 50% of the ETF for tax deferral.

ADVICE

Minimum Assets for ETF Viability

Launching a personal ETF is cost-effective only if managing at least $50 million to keep fees reasonable.
Below that, the expense ratio can become prohibitively high, making other options preferable.

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Wes Gray, the Alpha Architect himself, stops by the Business Brew to discuss how he (a) created the ETF $BOXX, (b) helps people start their own ETFs, (c) why value and momentum work as factors, and much more.

This episode is a quick release after Corey Hoffstein's. It may or may not be the only episode we release for the next 13 days or so.

The release cadence is influenced by the amount of press BOXX has been getting. We hope to add to your understanding. As always, do your due diligence!

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