Welcome to the ETF Prime Podcast
One of the “most helpful plain-English resources for investors who want to demystify exchange-traded funds” – Bloomberg Businessweek
Latest Episode
Fast-Tracked IPOs, Prediction Markets & Preferred Securities
Rich Lee, Head of Program Trading & Execution Strategy at Baird, discusses index providers fast-tracking high-profile IPOs like SpaceX, along with the market structure and mechanics behind prediction market ETFs and tokenization. Doug Baker, Portfolio Manager & Head of Preferred Securities at Nuveen, breaks down the preferred securities market and spotlights the Nuveen Preferred and Income ETF (NPFI).
About the Podcast
ETF Prime is hosted by Nate Geraci. Learn how to make ETFs a part of your investment portfolio as Nate spotlights individual ETFs and interviews experts from across the country. ETF Prime is available on Apple Podcasts, Android, Spotify, and most other major podcasting platforms. Specific guest interviews can be accessed by visiting the ETF Expert Corner.
Recent Episodes
ETF Prime – Upcoming Guest Lineup
One of the “most helpful plain-English resources for investors who want to demystify exchange-traded funds.” – Bloomberg BusinessWeek
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April 6th – Wes Gray, CEO of Alpha Architect, talks value rotation, momentum stocks, and the ETF white-labeling business. Nancy Davis, Founder & CIO at Quadratic Capital Management, discusses the current market environment and the Quadratic Interest Rate Volatility & Inflation Hedge ETF (IVOL).
April 13th – Harry Whitton, Head of ETF Sales Trading at Old Mission Capital, explains his firm’s role in the ETF markets and offers unique insight into several recent ETF stories. Amrita Nandakumar, President of Vident Investment Advisory, describes their ETF sub-advisory business and fields rapid-fire ETF questions.
April 20th – Lara Crigger, Managing Editor at ETF Trends, goes in-depth on pot ETFs. Meb Faber, CEO & CIO at Cambria Investment Management, highlights their Cannabis ETF (TOKE).
April 27th – Janel Jackson, Head of US ETF Capital Markets at Vanguard, provides a behind-the-scenes look at the function and purpose of their capital markets team. Euclid Investment Advisory’s John Creekmur and Karl Ashley outline the investment approach behind the Euclid Capital Growth ETF (EUCG).
May 4th – Hector McNeil, co-CEO of HANetf, discusses the European exchange-traded product landscape which includes crypto ETPs. Greg King, CEO of Osprey Funds, dives into the world of digital assets and spotlights the Osprey Bitcoin Trust, the lowest-cost bitcoin fund in the US.
May 11th – Jeremy Schwartz, Global Head of Research at WisdomTree, lays out the investment case for emerging markets and the Emerging Markets ex-State-Owned Enterprises ETF (XSOE). Damien Bisserier, Co-CIO at ARIS Consulting, explains the RPAR Risk Parity ETF (RPAR).
May 18th – Jim Atkinson, CEO of Guinness Atkinson Asset Management, describes the process behind the first ever mutual fund to ETF conversion. James Davolos, Portfolio Manager at Horizon Kinetics, talks inflation risks and the Inflation Beneficiaries ETF (INFL).
May 25th – Matt Bartolini, Head of SPDR Americas Research at State Street Global Advisors, offers potential ETF solutions to the challenge of generating investment income. Jason Hsu, Founder & CIO of Rayliant Global Advisors, provides an overview on investing in China and their Quantamental China Equity ETF (RAYC).
June 8th – Jake Raden, Director of Product Management and Head of ESG at OpenInvest, explains the benefits of direct indexing and an ESG approach to investing. Liz Simmie, Co-Founder of Honeytree Investment Management, talks ESG, active management, and the Canadian ETF landscape.
June 15th – Joe Hohn, Senior Portfolio Manager at Dimensional Fund Advisors, discusses the firm’s entrance into ETFs and their upcoming mutual fund-to-ETF conversions. Amanda Rebello, Head of Passive Sales at DWS Group, expands on investment opportunities in China and the merits of currency hedging when investing internationally.
June 22nd – Jillian DelSignore, Head of ETFs & Indexing at FLX, details the rapidly-evolving nature of ETF marketing and distribution. Nick Cherney, Head of Exchange Traded Products at Janus Henderson, delves into the collateralized loan obligation market and their AAA CLO ETF (JAAA).
June 29th – Laura Morrison, Global Head of Listings at Cboe Global Markets, explains the firm’s role in the ETF ecosystem and covers the latest ETF trends. Steven McClurg, CIO of Valkyrie Investments, weighs-in on the prospects for a bitcoin ETF.
All guest interviews are available through our featured section “ETF Expert Corner” at etfstore.com and can be played directly from any mobile device. Full podcasts of ETF Prime can be downloaded for free at etfprime.com, Apple Podcasts, Spotify, Android, and other major podcast apps.
For all media inquiries regarding ETF Prime, please visit here.
ARK Space ETF Debut, Bond ETF Liquidity, & SPACs
ETF.com’s Drew Voros covers several recent stories including Fidelity’s bitcoin ETF filing, AdvisorShares’ Gerber Kawasaki ETF filing, and ARK’s Space Exploration ETF launch. MarketAxess’ John Keller explains how they’re automating bond trading and facilitating bond ETF liquidity. Tuttle Tactical Management’s Matt Tuttle spotlights The SPAC and New Issue ETF (SPCX).
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The SPAC Tsunami
ETF.com’s Sumit Roy discusses the apparent frothiness in SPACs and offers a quick snapshot of the SPAC ETF landscape. CFRA’s Todd Rosenbluth covers a range of topics including a recent ETF investor survey, ESG ETFs, bitcoin ETFs, and more. Toews Asset Management’s Phillip Toews talks markets and highlights the strategies underlying two Agility Shares ETFs.
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Direct Indexing: ETF Killer?
Orion’s Rusty Vanneman goes in-depth on the pros and cons of direct indexing. ETF.com’s Drew Voros highlights finalists for the 2020 ETF.com Awards. Amplify ETFs’ Christian Magoon discusses the firm’s recent success, including ETFs covering cannabis and blockchain.
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Individual Bonds vs. Bond Funds
We previously highlighted the basics of municipal bonds and their potential benefits to investors. The next question is, how do you actually get exposure to munis? Individual bonds? Mutual funds? ETFs? Which way is best? Ultimately, that depends on the investor.
The advantages of individual bonds
One advantage of individual bonds is the ability to control interest rate risk. Currently, a major concern for bond investors is low interest rates. Paltry bond yields mean less income and perhaps more importantly, if rates rise, the market value your bond portfolio declines. To lower potential interest rate risk, one option is to build an individual bond “ladder” with staggered maturities every year. When the bonds mature in a theoretical higher rate environment, the bonds can be reinvested at higher rates.
In addition, shorter maturity bonds will decline less than longer maturity bonds, helping insulate the portfolio from the damaging effects of rising rates. Another advantage to laddering is customizing cash flow. Some investors want a predictable cash flow stream of monthly income and predetermined maturities. Laddering individual bonds can help accomplish that.
Another advantage of individual bonds is the state tax exemption. There are several good national muni bond ETFs, however there are advantages to constructing a portfolio of individual bonds to reduce state income taxes. Investors can avoid paying taxes on interest by owning tax exempt munis issued within their state of residence. If you live in a less populated state like Missouri or Kansas, there are only one or two mutual funds and no ETFs that hold munis exclusively from those states. Big states like California and New York have many fund options. A few states have no state income taxes, so issuer state isn’t a concern for those residents. State specific mutual funds for smaller states typically have high fees, along with elevated interest rate risk. For a Missouri resident, a portfolio of individual Missouri tax exempt munis saves paying the 5.4% state income tax on coupon income and also avoids the high fund fees and excessive interest rate risk.
The advantages of ETFs and Mutual Funds
Constructing a portfolio of individual bonds isn’t for everybody. It requires specific knowledge of where to find the bonds, due diligence on the issuers, and managing transaction costs. Municipal ETFs and mutual funds are a convenient option for those who wish to avoid navigating the ins and outs of muni markets. Mutual funds have traditionally dominated the fund space and there are some good options, however, high fund fees can be a concern. Muni ETF fees are often lower and the universe of ETF options is rapidly expanding. ETFs can also offer tax efficiency, transparency, and liquidity advantages over mutual funds.
Conclusion
Municipal bonds are popular with fixed income investors because of their potential tax benefits, diversification, and income generation. The highest quality munis have lower default risk than some types of corporate bonds, particularly junk rated bonds. Understanding key differences between the various ways to gain exposure to this unique segment of the market can help investors select the right muni bond options for their portfolios.
We always love hearing from you! Please email me at bmurray@etfstore.com if you have any questions or would like to start a conversation about how I can help you with your money and financial plan. You can also follow me on Twitter @BrianMurrayCFA and LinkedIn.
Brian Murray MBA, CFA is an Investment Advisor at The ETF Store. He has 23 years of experience as a fixed income portfolio manager for multibillion-dollar institutional portfolios. He helped develop the fixed income department at a $55 Billion investment advisory firm where he managed hundreds of portfolios for individual investors.