The Exchange ETF conference is happening February 5-8 in Miami, FL. Several people from the Tidal Financial Group team will be in attendance both as presenters and participants. The conference is being run by VettiFi, the firm that manages the ETF Trends and ETFdb investing sites. Todd Rosenbluth, the Director of Research at VettiFi, joined the ETF Think to discuss the conference and offer his insights on the ETF marketplace.
What is the Exchange ETF conference all about? It’s designed to be a broad educational event designed to be a little bit different from other conferences. Its plan is to ease back on the number of events and scheduled speakers, while emphasizing the number of networking opportunities available. Rosenbluth describes it as a conference by financial advisors for financial advisors but says there will also be plenty of focus on the traditional asset management track as well.
Jon Fee, the Chief Marketing Officer at VettiFi, also joined to explain the philanthropic focus of the event. They will be partnering with the Susan G. Komen Foundation, Junior Achievement and Surfrider so that participants can also partake in charitable and mentoring opportunities.
Returning to the financial markets, Rosenbluth was asked his opinion of where the energy market is today. He says that investors had better understand where it fits in their portfolio and what an ETF holds because it doesn’t have what it used to. Energy was historically considered a value sector, but that’s no longer the case. He points out that energy has just a 1.6% weighting in the S&P 500 value index, but roughly 8% in the growth index. The landscape is further complicated by the addition of alternative energy and renewables. Some will treat those as separate themes while others may lump them together. As always, knowing what you own is a good rule of thumb.
Overall, Rosenbluth explained that the market is complicated. Energy has become a growth sector more than a value sector (thanks to some definitional tweaks by the index providers). Meta’s share price plunge dropped into the value category. Tesla may or may not be an ESG stock. Even momentum investing has been thrown for a loop by overweighting in healthcare and energy. Investors need to be very aware of what’s changing.
The discussion shifted to international and emerging markets stocks, which have been off to a fast start in 2023. Rosenbluth explained that these areas were written off by investors as recently as just a few months ago. It is easy to say that international was due for a comeback for a while, but many didn’t think we’d see the relative economic improvements in Europe. The reopening in China has also added an assist. He believes that investors may be underappreciating the dollar’s role in this year’s performance. Most people who are investing in non-hedged products probably don’t even think about the impact that the dollar plays on their investments. It’s another example of knowing what’s in your portfolio.
Other key takeaways:
- It’s important that investors understand that thematic investing and tech aren’t synonymous. Thematic investing can also include things, such as travel, infrastructure, and renewable energy. Not all advisors want to touch thematic ETFs, but there are some worth considering.
- A lot of people are still considerably underweight in international investments, but that may be changing. International equity ETF flows are beating U.S. equity ETF flows by a 20-to-1 margin so far in 2023.
Advisors have been favorable long-term towards crypto and are finally gaining some comfort holding it in portfolios. Many are just looking for regulatory clarity. 2022 has shown us that you can’t give up on any investment if you believe in the story. You need to give it time to play out.
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