Crypto, disruptive technologies and a chat with DoubleLine’s Jeffrey Sherman at the ETF event in Miami
Hello from Miami! I traveled to Florida this week for the Exchange ETF conference at the Fontainebleau Miami Beach hotel. Today’s the last day of the four-day conference, so here’s a glimpse of some of what went down during the sessions and on the sidelines as the exchange-traded-fund industry gathered for the event.
ARK Investment Management founder Cathie Wood and Goldman Sachs Group’s Katie Koch each took to the stage in Miami this week to discuss investing in disruptive innovation.
See: ‘Private markets get it,’ but disruptive tech is beaten-up in the stock market, says ARK’s Cathie Wood
On Wednesday, Koch, chief investment officer of public equity for Goldman Sachs Asset Management, fielded questions concerning competition with Wood in disruptive investing. In such a massive equity market, “there’s room for all of us,” said Koch, while also expressing her respect for Wood.
“Our themes are broader in nature,” she said, pointing to Goldman ETFs targeting future tech leaders, climate transition and the future of the consumer, health care and real estate and infrastructure. The actively-managed ETFs invest in themes that will “change the world,” said Koch. Goldman uses “valuation discipline,” she added, saying “we’re not unconstrained growth.”
Shares of the Goldman Sachs Future Tech Leaders Equity ETF
have dropped 25.5% this year through Wednesday, holding up better than the ARK Innovation ETF
which has plunged 34.7%, according to FactSet data.
“Wall street suffers from siloization,” said Brett Winton, ARK’s director of research, during a separate session Wednesday at the Exchange ETF conference. Wall Street tends to focus on sectors, with many analysts trying to fit technology into “boxes,” he said, while ARK is focusing on technologies.
Bitcoin was in the spotlight at the ETF event, with Michael Sonnenshein, chief executive officer of Grayscale Investments, speaking on stage Tuesday about the evolution of the crypto investor. On the sidelines of the event, in one of the cabanas that the Exchange ETF conference setup around the pool for meetings, Sonnenshein told MarketWatch that financial advisors have moved from “crypto curious” to “crypto engaged” as more of their clients want exposure to it.
Many clients of financial advisors are “self-directed” in seeking exposure to Grayscale Bitcoin Trust
he said, and advisors recognize that their clients’ interest in crypto may be taking them “off their platforms.”
Grayscale has filed an application with the U.S. Securities and Exchange Commission to convert Grayscale Bitcoin Trust into a spot bitcoin ETF, with a ruling deadline in July. Sonnenshein said the asset manager is keeping the option of potentially suing the SEC “on the table” should it reject the fund. While investors may invest in exchange-traded funds that invest in bitcoin futures, the SEC has yet to approve of a spot bitcoin ETF.
The regulator has also rejected Fidelity’s spot bitcoin ETF, but Greg Friedman, the head of ETF management and strategy at Fidelity Investments, told MarketWatch in an interview at the Exchange ETF event that “we are still engaged with the SEC.”
Meanwhile, Fidelity announced Tuesday that it launched the Fidelity Crypto Industry and Digital Payments ETF (FDIG), “which will not offer direct exposure to cryptocurrency,” and the Fidelity Metaverse ETF (FMET). The Fidelity Crypto Industry and Digital Payments ETF provides exposure to “companies that support the broader digital assets ecosystem, including those involved in crypto mining and trading, blockchain technology, and digital payments processing,” Fidelity said in the announcement.
Elsewhere at the Exchange ETF conference, Jeffrey Gundlach, chief executive officer and chief investment officer of DoubleLine, warned Tuesday on stage that a “calamity” may be coming for markets, potentially in 2023.
See: ‘Calamity’ may be coming, stock-market setup similar to 1999: Jeffrey Gundlach
On Wednesday, MarketWatch met with DoubleLine’s deputy chief investment officer Jeffrey Sherman at the event. Weighing in on the Federal Reserve’s efforts to combat soaring inflation by tightening its monetary policy, Sherman expressed particular concern over its plans to shrink its giant balance sheet.
“It’s the most dangerous part of the Fed’s policy,” said Sherman, who worries about the speed of the reduction. He said the Fed aims to reduce the balance sheet faster than the central bank attempted before the pandemic, which at the time roiled markets. “It’s going to be fast, it’s going to be furious,” he said.
That’s a wrap on the April 11 – 14 conference in Miami. As usual, here’s a look at the top and bottom ETF performers in the past week through Wednesday, according to FactSet data.
North Share Global Uranium Mining ETF|
Teucrium Wheat Fund|
Global X Uranium ETF|
VanEck Junior Gold Miners|
Global X Silver Miners ETF|
|Source: FactSet, through Wednesday, April 13, excluding ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater|
ProShares Bitcoin Strategy ETF|
VanEck Rare Earth/Strategic Metals ETF|
KraneShares CSI China Internet ETF|
Amplify Transformational Data Sharing ETF|
Invesco WilderHill Clean Energy ETF|
Exclusive: BlackRock plans first China ETF product this year – sources (Reuters)
Billions Are Pouring Into Chipmaker ETFs Stung by Stock Drops (Bloomberg)
A Spot Bitcoin ETF Still Seems Unlikely (CoinDesk)
Thematic funds triple share of global investments in a decade (Financial Times)