But just because big firms control most of the assets doesn’t mean they offer the most innovative products. Some of the most interesting products we have seen have come from smaller shops who are not afraid to challenge the big players. We have been fortunate to interview many of them in the three years since we launched our podcast and so we thought it would be interesting to put them together into a compilation of smaller firms that are helping to launch new products that give all of us a more robust series of choices within the ETF space.
Here are some of the more interesting ETF companies we have featured on Excess Returns.
ABOUT THE PODCAST
Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.
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MORE ABOUT INVESTING IN ETFS
Exchange traded funds (ETFs) are investment vehicles that hold a basket of securities, such as stocks, bonds, or commodities, and trade on a stock exchange like individual stocks. ETFs offer a number of advantages for investors.
Diversification: ETFs allow investors to diversify their portfolio by owning a broad range of securities in a single fund. This can help to spread risk and potentially reduce volatility in the portfolio.
Low costs: ETFs often have lower expenses than actively managed mutual funds, which can help to increase returns for investors.
Flexibility: ETFs can be bought and sold throughout the trading day, allowing investors to easily adjust their portfolio in response to market conditions or personal circumstances.
Transparency: ETFs must disclose their holdings on a daily basis, which allows investors to see exactly what they are investing in. This can be particularly useful for those who want to invest in specific sectors or industries.
Tax efficiency: ETFs generally have lower capital gains distributions than actively managed mutual funds, which can make them more tax efficient for investors.
Access to specialized investments: ETFs offer investors access to a wide range of specialized investments, such as international markets, commodities, and niche sectors, that may be difficult to access through traditional investments.
Professional management: ETFs are managed by professional fund managers who are responsible for selecting the securities in the fund and rebalancing the portfolio as needed. This can be beneficial for investors who don't have the time or expertise to manage their own investments.
Overall, ETFs can be a convenient and cost-effective way for investors to build a diversified portfolio and gain access to a wide range of investment opportunities. It's important to carefully research and compare different ETFs to find those that align with your investment goals and risk tolerance. As with any investment, there are also risks associated with ETFs, including the risk of market fluctuations and the possibility of losing money. It's important to understand these risks and consult with a financial advisor or professional before making any investment decisions.