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Dave Nadig
3:00
Good afternoon!
Welcome to ETF.com Live!  As always you can ask your questions in the box below.
I'll get to as many as I can over the next 30 minutes or so (maybe a bit longer today as there are alot already!).
We'll post a transcript right here when we're all done.
3:01
Let's get rollin!
Outsider
3:01
OK, I'll bite this week: Soundtrack?
Dave Nadig
3:01
Heh.  Too funny.
So, Josh Brown turned me on to the Beastie Boys Book this week, which I've been listening to, so I have this DJ Kool Herc playlist up
OK, real stuff now.
Marly Hanover
3:02
Favorite moment(s)/best takeaways from Inside ETFs?
Dave Nadig
3:02
So this week was the Inside ETFs conference florida, which is now FOUR DAYS long.  And as exhausting as it sounds.
3:03
If I had to take one thing away: I was SHOCKED at how much ESG discussion there was honestly.  I know *I* talk a lot about ESG ... but the assets haven't come in a big way.
So I expected it to be a bit in the corners.  but nope.  EVERYONE was talking about it.
It helps that Paul Tudor Jones gave a pretty passionate delivery talking about what Just Capital is doing (its a nonprofit that surveys Americans about what they care about when it comes to governance).
3:04
I guess my second would be that Smart Beta is far from "over" -- if anything I would say the definition has now grown to "Anything But Market Cap" -- so almost every new product launch and hot topic could be wedged into that bucket.
Larry
3:04
As we all know, most AUM goes to the lowest fee ETFs. But, there have been a few strategic beta ETFs that charge (very) low fees with Goldman Sachs' GSLC being the poster child. Recently, Legg Mason just threw in the towel on their three "Diversified Core" ETFs which start at comparatively high fees of .30, .40, .50.  With all the ETF infrastructure in place, why don't fund companies throw a "hail Mary" and drastically lower the fees of failing & poorly priced funds in the hopes that they might gain AUM and consequently save the ETFs? Couldn't you do this for 4/5 months and see what happens? (Surely you will make less money - at least initially - but you can't make any money if you don't have anything to sell.)
Dave Nadig
3:05
Well, to some extent we HAVE seen that happen.
We see a pretty continuous stream of fee reductions -- almost every week, someone is taking their 70 basis point strategy down to 50, or whatnot.
3:06
Whether its a hail mary or not is of course depending on whether they then let those funds sit for long enough.  Just being cheap isn't a guarantee of assets.
However -- if you look at what's happened with GraniteShares, they're focus on cost really does seem to have paid off.
So it CAN work, but the flip side is -- you need to be able to run a very very lean shop to compete on price, or to have a very large asset base already to amortize across.
Dale
3:06
Macro picture on issuers increasing their numbers of commission-free ETFs?
Dave Nadig
3:07
So one of the big announcements this week was Schwab and Fidelity expanding their commission free platforms a lot.  Up to about 500.
3:08
It's a clear rebuttal to Vanguard effectively taking the whole marketplace free to trade.  So thats just the next corner of the price war.
The challenge is that at the end of the day SOMEONE pays for trading.
In the "old model" the issuer would pay something to the broker to be part of the no-transaction fee marketplace.
3:09
But obviously if EVERYTHING goes commission free, the broker dealer themselves is on the hook for some cost.
Firms that have enough other stuff to sell can make it up around the edges -- just like Fidelity selling zero fee mutual funds.  They make it up because they expect you to buy some non-zero product as well.
BitAlready
3:09
Will the fact that RealityShares is also filing for a bitcoin ETF influence SEC’s decision any sooner solely because more and more issuers are filing, seemingly making this an eventuality?
Dave Nadig
3:10
I don't think 100 filings would somehow make the SEC say "OK, we'll do this thing we don't want to do."
That said, the rumor mill is rampant with "its coming soon!" hype.  I don't have any inside info, but certainly even the public comments suggest the SEC is continuing to work the problem, and isn't just flat out saying no.
So I truly do suspect it's just a matter of time.
3:11
The only question is, do they approve everything, do they publicly "anoint" a particular kind of filing and give everyone time to get on the same page and refile, or do they approve, say, a single fund.
I would be very very surprised if they did the latter.  They generally don't like making monopolies if they can help it, even short term.
3:12
So my bet is - we get guidance about what a crypto ETF has to look like, and then all the players get on board.  Then it's just a marketing race really.
OK, here is possibly the nerdiest question anyone has ever asked:
John
3:12
Is the fee to the SEC  to launch and ETF  $121.20 for every $1M  in net asset value per ETF? I'm trying to understand if there are standards fees of how is it calculated.
Dave Nadig
3:13
SO this is DEEP end of the pool stuff I can only partially do from memory.  I don't know of a per-million "launch" fee (I could be COMPLETELY wrong).
What I DO know is there are TRANSACTION fees, for sure.  When people talk about "The SEC Fee" what they mean is a per million transaction feel, which is I think $13.
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