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Keeping it active
This week saw ETF Express talk with Chris Tinker of Libra, a London-based firm offering stock valuation and systematic market timing analysis for active investment managers.
Tinker recently applied his analysis to the ARKK active ETF fund run by Cathie Wood and, by selecting a 35-stock portfolio from the four ARK portfolio funds, as ARKK does itself, and rebalancing periodically, he reports that he created a systematic risk management process around thematic stock selection – from the same core universe – but with better risk and return outcomes.
Tinker loves ETFs for all the reasons usually cited – liquidity, transparency, low fees and democratisation of investment – but says: "You look at active ETFs and they sound like a brilliant idea until you realise that you are giving everything away for free."
Tinker has been in discussions with semi-transparent model providers in the US, Blue Tractor.
We have also carried two pieces of research this week from those clever people at Cerulli Associates who reported on the launch of China’s ETF Connect which, the firm says, will expand the potential growth of ETF usage across mainland China.
Their second piece of research of interest to the ETF market highlighted the fact that emerging markets offer opportunities for ETF issuers and index fund providers that can build compelling propositions.
In the news this week, we noted that State Street Global Advisors’ global survey of institutional investors on how they view the fixed income market and how they are allocating their investments amid the ongoing market volatility reported a growth in use of fixed income ETFs. "Institutions are embracing active and index fixed income ETFs at an accelerating pace to optimise their portfolio’s asset allocation and liquidity in this challenging market environment," says Bill Ahmuty, head of the SPDR fixed income group at State Street Global Advisors.
Beverly Chandler, Managing Editor
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Companies in this issue
ARKK
AXS Investments
Bitwise Asset Management
Blue Tractor Group
Cerulli Associates
Libra
Simplify Asset Management
State Street Global Advisor
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