ETF Edge, January 17, 2024

ETF Edge, January 17, 2024

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

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