ETF Edge, January 17, 2024
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Bitcoin ETF Trading and Options
- Bitcoin ETFs have launched with big volume
- The ETFs are accurately tracking Bitcoin
- Options on spot Bitcoin ETFs are the next logical step
- CBO has filed with the SEC to list options on these ETFs
- When options become available, more hedge fund players may enter the market and chase the top Bitcoin ETFs with the most volume
Impact of Options on Bitcoin
- Options trading on Bitcoin may increase retail and institutional investment
- Zero DTE options (options with zero days to expiration) may become popular
- Zero DTE options trading could involve more money chasing the top Bitcoin ETFs with the most volume, such as the iShares product I-bit
- Bitcoin prices may see more volatility due to increased options trading
Summary of ESG ETFs
- ESG (environment, social, and governance) ETFs have had significant popularity
- TCW believes that ESG data should be used as underlying data for investment processes
- The industry made a mistake by creating ESG products rather than using ESG data for investment strategies
Proxy Voting in ETFs
- The Transform 500 ETF engages in proxy voting and dialogue with management
- TCW believes that proxy voting should be used to drive long-term outperformance for companies
- The ETF voted against management in 84% of proxy votes
Supply Chain Transformation ETF
- The Supply Chain Transformation ETF focuses on the onshoring trend in the US
- Companies involved in the supply chain transformation include railroads, infrastructure builders, and storage solution providers
- The ETF invests in companies that are involved in the buildout of onshoring facilities
- Onshoring is driven by the need to address global supply chain issues, geopolitical concerns, and security issues related to semiconductors and pharmaceuticals
Outlook for the ETF Market
- Dave will provide his thoughts on broader ETF trends for 2024 in the ETF Edge podcast