ETF providers are eager to jump on hot investor trends

Article Excerpt

Investor fads that are likely to blow over in a relatively short time will seldom be captured in an ETF. There is just not enough time for the manager to get the product to market and generate enough investor interest. However, when fads become trends with longer expected time horizons, managers are eager to get products to waiting investors. We continue to urge caution. One recent trend to spur ETFs is cryptocurrencies. There are now 5 of Canadian funds, which together have attracted more than $1.5 billion in investor inflows in a short period of time. U.S. regulators are also considering at least 11 applications to launch crypto ETFs. Other examples of trend investing include Special Purpose Acquisition Companies (SPACs), which are listed shell companies that look for suitable targets to acquire or merge with. One highly successful SPAC was Diamond Eagle Acquisition, which merged with DraftKings, the sports betting company. This effectively provided DraftKings with a ready listing vehicle rather…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.