Lessons from the biggest ETF show on Earth

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By the time you are the world’s biggest event in a fast-growing sub-segment from the financial industry, people give consideration.

That was certainly the case with’s Inside ETFs conference, that I’ve just returned.

There were a number of key takeaways.

One is that while everyone loves to worry – it makes them look seasoned, frugal, and smart – frequently that worry is misplaced.

Professor Jeremy Siegel did a great job of debunking the strength of Shiller’s CAPE Ratio, which puts the P/E ratio in the context of the prior ten years and that has shows U.S. markets in above- average territory.

Siegel’s conclusion was that no, U.S. markets aren’t widely overpriced.


    CIBC analysts reduce bank growth forecasts as oil, economy drag

    Another important lesson was that emerging markets may or may not emerge. The quote to keep in mind on this subject: “Emerging markets are markets you cannot leave in an emergency.”

    There were a lot more, to be certain, throughout four days – but two more have profound implications, when extrapolating them into a changing world of regulation and disclosure in Canada:

    The first: Never underestimate the strength of free. (You would be surprised what individuals would do for a free coffee card)

    The second: Behaviours could be altered. With compelling clarity and transparency, change can materialize, and compliance can reach previously hard-to-dream-of levels.

    The implications for those is that while 2015 marked the 25th anniversary for ETFs, 2016 – despite, and perhaps even helped by more challenging markets – could be their true breakout year in Canada. And you know what? Are they ready? Yes. Are you?

    As a final note, here are the top five quotes from Inside ETFs, as relayed by Bloomberg ETF analyst Eric Balchunas:

    1. “What are these folks doing?”- New Bond King Jeffrey Gundlach’s undertake the FED’s December rate hike.

    2. “Don’t let them push us Into the Darkness!” – Factset Research System’s director of ETFs Dave Nadig, worrying that ill-conceived regulatory changes might have devastating implications.

    3. “We actually Are a classic Industry, Second Simply to Wal-Mart Greeters” – Ritholtz Wealth CEO Josh Brown, suggesting financial advisors, who have an average age of 50.9, make use of social networking to remain relevant

    4. “Everything Blows up every 7 years”  – Mr. Wonderful Kevin O’Leary on why he effectively is all-in the “Smart Beta” phenomenon, looking to ride his factors – quality, yield and low volume – to a Mr. ETF status via his U.S. listed O’Shares.

    5. “A Pool Filled with Beer could be the only answer” – Boom Doom and Gloom’s Marc Faber, an esteemed compatriot of mine (no, not Canadian, Swiss), who captures very well here the sentiment shared by many people a specialist advisor or investor after January’s wild ride.

    Yves Rebetez is managing director of ETFinsight.

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