My guest this week is Eric Balchunas, the senior ETF analyst for Bloomberg and the author of the Institutional ETF toolbox. This episode is intended for those in the asset or wealth management industry who have considered using ETFs in their portfolios, or for the individual investor who likes to stay up to date on trends in the market for asset management products. We cover all aspects of ETFs in some detail, and luckily in ways that have little overlap with a few other recent ETF-centric episodes on two of my favorite podcasts: the Meb Faber Show and Capital Allocators with Ted Seides with Matt Hougan and Tom Lydon respectively.
We open with Eric’s favorite ETF tickers, discuss the pros and cons of ETFs versus other investment vehicles, and explore the largest areas of opportunities for new ETFs coming to market in the years to come. ETFs have become the vehicle of choice for many investors, so it was about time we covered them in depth in this forum. As you’ll hear, Eric is the right person to teach the world about ETFs, thanks to deep domain knowledge and unflagging enthusiasm. Please enjoy my conversation with Eric Balchunas on the past, present, and future of ETFs.
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.
Follow Patrick on Twitter at @patrick_oshag
Books Referenced
Quantitative Momentum: A Practitioner's Guide to Building a Momentum-Based Stock Selection System
Links Referenced
Chart – There Are Now More Indexes Than Stocks
Show Notes
2:32 - (First Question) – Eric’s favorite ETF tickers
4:07 – How Eric got started into his career and how it led him into the ETF world
8:04 – An overview of the ETF landscape
10:10 – Active managed ETFs
12:17 – Chart – There Are Now More Indexes Than Stocks
13:32 – Key variables he thinks about when assessing a new ETF
15:18 – Evaluating shiny object ETFs
17:30 – The appeal of ETFs
20:18 – Future regulatory concern of the tax treatments of ETFs
22:10 – The liquidity advantage of ETFs and why that can actually be bad for investors
24:19 – What would Eric do to build the perfect ETF
26:03 – What are the future trends for new ETF’s launched
29:40 – Categories that work well in the ALT world of ETFs
31:32 – Most effective marketing strategy for ETFs
35:50 – Quantitative Momentum: A Practitioner's Guide to Building a Momentum-Based Stock Selection System
36:28 – How will the winning asset managers have done differently in this space
41:56 – How the next downturn could impact ETFs
46:17 – Do ETF’s create pricing distortions
50:33 – What trend is Eric most interested in right now
53:21 – Alpha through Beta
55:51 – Kindest thing anyone has done for Eric
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
Invest Like the Best with Patrick O'Shaughnessy