Apologies but today I have slightly blatant plug – followed by my take on an Asian investment trust which released interims today.
So, to the plug.
Please do visit www.etfstream.com.
Its my latest publication, aimed at the ETF space. Regular readers will know that I am a big fan of the index tracking space and I think that the ETF industry is disrupting an asset management model that was in need of a good kicking. My core view is that active managers, especially in the investment trust space, will actually prosper in a world increasingly dominated by passive tracker funds – just not all of them!
The good news for me is that ETF disruption is forcing the asset management sector to focus on three things.
First reducing costs for the end investor. My core contention is that the total cost of ownership for retail investors including professional advice needs to move below 150 basis points, and maybe even 100 basis points in the long run. ETFs serve the valuable purpose of pushing fees down for the fund management segment.
Secondly ETFs and their issuers are embracing new technologies – robo advice – and more direct marketing (theme based indices) to increase investor engagement and excitement. That means they occassionally end up producing daft products but by and large this process leads to valuable innovation.
Last but by no means least ETFs will force good active fund managers to be more active. They will also hopefully put a stop to the rise of the closet index tracker masquerading as an active manager. In sum, ETFs are GOOD for genuine active managers. Also as more and more money chases passive funds, it’ll open arbitrage opportunities for actuve managers.
So, in sum, ETFs are a force for the good. But my view is that the industry need a sensible news and analysis service that goes beyond the news and pr releases and looks at the big stories.
That’s what ETFstream is all about. It looks at the ETF space in an intelligent way, never scared to criticise, but always with an eye to a fresh new story. It’ll also be really focused on great asset allocation content, with an eye to aggregating great investor focused research from the passive sector.
We’ve gone live today and we’ll be progressively ramping up our coverage over the next few weeks – with new events emerging next year.
We won’t be terrifically focused on America – www.etf.com already does a great job there. But we will be tracking everything in Europe and Australia at launch with more coverage coming soon for Asia Pacific, and especially China.
So, watch this space – alongside my existing venure AltFi this is going to be a great place for world class journalism. If you need to contact ETF Stream, please do drop the team an email at team@etfstream.com.
ASIA
A quick note today on the latest interims from Schroder’s Asian Total Return Trust, in which I have shares. This is one of my core holdings partly because it builds on Schroders deep expertise in Asia, and partly because it’s strategy is to also use hedges and options to smooth out returns.
I see no reason to revise my opinions based on the latest interims. NAV over the six month period increased 19% compared to 14% for the benchmark. Crucially the manager also comments on whether Asian stocks are in a bubble – and concludes that they aren’t. Which I agree with – my sense is that markets could rise much, much further. But the fund is quietly starting to buy buy put options on some indices as well as hedging some currencies. This strikes me as an excellent move – the geopolitical risk from the region is increasing inexorably and sooner or later China’s great credit revolution will produce a nasty crash. Common sense suggesting taking a small bit of profit off the table now to hedge on the downside whilst also remaining mostly invested.
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