Proceed with caution: State of the Exchange Traded Products
Our Reformed Broker ruminates on the future of Exchange Traded Products (ETPs), which he believes will, at a certain point in the coming decade, completely swamp the mutual fund and ultimately eliminate it from the market.
Our Reformed Broker ruminates on the future of Exchange Traded Products (ETPs), which he believes will, at a certain point in the coming decade, completely swamp the mutual fund and ultimately eliminate it from the market.
Exchange Traded Products (ETPs) are probably in the 3rd or 4th inning of their renaissance.聽 As a professional and both a frequent user and critic of them, I've learned to take the good with the bad.
I believe that at a certain point in the coming decade, the ETP wrapper will completely swamp the mutual fund and ultimately put it out of its misery.聽 This is not to say that I'm thrilled with everything happening in ETP land, specifically the rise of derivative-based ETNs that are probably way less steady and understandable than they should be.
The state of the biz via Bloomberg below:
Innovation is great, but we have to accept the fact that there will be failed and even dangerous innovations along the way.聽 In my view, we are at the stage now where many dangerous notions are being productized - so it is up to the individual to not do stupid things with new vehicles they don't truly understand.