Happy New Year to ALL. Like you, the Toroso team has given 2021 a great deal of thought and fear that predictions about 2021 have far too many challenges to be reliable. Instead, we make the following resolutions to you:
Since structure matters, we resolve to maintain the discipline that proper diversification provides a balanced core for portfolio construction. We will not be surprised by 2021 equity markets being up 20%, down 20% or flat on the year! If anything, the conditions for 2020 prove that rational thinking may make an investor skew away from risk and thus miss out on opportunities.
We will remain advocates of ETF innovation and growth in support of both financial advisors and sponsors. We will be in the bunker helping those Members who have embraced our enthusiasm for enhancing our ETF Think Tank community and research.
To continue pursuing a form of collaboration with our ETF Think Tank Members. We are stronger together! One year does not necessarily make a trend! Smart pundits about markets will remind us that while we got it right in 2020, we must remain humble!
We resolve to maintain the discipline that proper diversification provides a balanced core for portfolio construction. In other words, to achieve investor goals, we believe that a proper portfolio should be diversified and own some uncorrelated assets. Again, we will not be surprised by 2021 equity markets being up 20%, down 20% or flat on the year! Not just with the market, rational thinking and 2020 were not exactly compatible. Therefore, please continue to engage with us! Our network is growing each day and shared skepticism, optimism and or details about how structure matters will continue to strengthen how we add value to each other.
Complacency may be comforting, but that does not mean risk isn’t lurking and conditions can’t change. Amusingly, while we are known to be fans of Bitcoin, we respect cash also as an asset class. To highlight the point, we offer the following VIX chart as a reflection of 2020. Prepare for volatility in 2021!
We will remain advocates of ETF innovation and growth in support of both financial advisors and sponsors. This means we will be in the bunker helping those Members who have embraced our enthusiasm for enhancing our ETF Think Tank community and research. Ultimately, our value proposition will remain to enhance yours. When markets are a battle ground of opportunities and measured risk, shared insights and resources can make a world of difference. In June 2020, we published a report called “Measuring Innovation in the ETF Industry”. Prior to the piece, it seemed like everything that was written about ETFs focused on fee wars and how broad-based funds were taking in all the flows. Be on the lookout for an update on this piece. Bottom line, while the average fee remains 19 Bps, revenue from active strategies now represent 8.64% of the industry run rate revenues, which topped $10.04 billion at year-end. (See KPI data for details). Revenue from Active ETFs at the end of 2019 were just about 5.81%, so this is clear evidence that innovation is fully embraced by the investor so long as alpha is delivered.
We resolve to continue pursuing a form of collaboration with our ETF Think Tank Members! We are stronger together! One year does not necessarily make a trend! Please let us know how we can be a resource. We are far more than just ETF Strategists. Having doubled in size in 2020, we are businesspeople who see the ETF market as a bridge for opportunity.
Get Think Tanked: Commodities with Mike McGlone of Bloomberg
This Thursday, during our Get Think Tanked Happy Hour, our guest speaker is Bloomberg Intelligence Commodity Strategist Mike McGlone. Mike made a pristine call about his anticipation for Bitcoin to breakout, but as a commodities analyst he also covers Soybeans and Corn. Mike appears to be constructive on the sectors which is important in terms of debates about price inflation. Let’s face it – all the talk about the velocity of money running amuck with coordinated global central banks pushing for inflation make for a great debate on where commodity prices should go.
We do not know what 2021 will bring us. Markets are in unchartered waters and risks need to be measured by proper diversification. Our resolutions can be summed up in three words: Diversify, Innovate, and Collaborate. We believe that together these words can help us all protect our clients and expand our businesses.
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