By Mark DeCambre
Happy Thursday, ETF Wrap readers! It is a been a roller-coaster ride on Wall Street. Stock markets were knocking on the door off a correction just last week, after being jolted lower by the new omicron variant of COVID. Now, the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.65% stands within shouting distance of its Nov. 18 record close. What a ride!
We’ll discuss some strategies around dealing with volatile markets. And we’ll also talk about the metaverse trend, which some are proclaiming as a new frontier for the internet and communication. But is it fertile ETF ground?
Send tips, or feedback, and find me on Twitter at @mdecambre or LinkedIn , as some of you are wont to do, to tell me what we need to be jumping on.
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Read: What is an ETF? We’ll explain.
The good…
| Top 5 gainers of the past week | %Performance |
| VanEck Oil Services ETF /zigman2/quotes/207596637/composite OIH | 9.8 |
| U.S. Oil Fund LP /zigman2/quotes/203483736/composite USO | 9.7 |
| U.S. Global Jets ETF /zigman2/quotes/207744796/composite JETS | 9.4 |
| SPDR S&P Oil & Gas Exploration & Production ETF /zigman2/quotes/203527521/composite XOP | 9.0 |
| iShares MSCI Brazil ETF /zigman2/quotes/208893627/composite EWZ | 7.7 |
| Source: FactSet, through Wednesday, Dec. 7, excluding ETNs and leveraged products . Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greate r |
…and the bad
| Top 5 decliners of the past week | %Performance |
| Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF /zigman2/quotes/207481984/composite PDBC | -23.4 |
| ProShares Bitcoin Strategy ETF /zigman2/quotes/230440344/composite BITO | -10.9 |
| Amplify Transformational Data Sharing ETF /zigman2/quotes/204122720/composite BLOK | -4.3 |
| VanEck Rare Earth/Strategic Metals ETF /zigman2/quotes/205602686/composite REMX | -3.5 |
| Global X Lithium & Battery Tech ETF /zigman2/quotes/208067690/composite LIT | -2.3 |
| Source: FactSet |
Grayscale’s brief ETF sojourn
Here’s a fun one to get our readers started off.
Since at least Monday, FactSet System Inc. FDS had listed crypto-focused asset manager Grayscale Investment’s Bitcoin Trust GBTC as Grayscale Bitcoin Trust ETF on its platform, which is used by professional investors and other Wall Street clients, including MarketWatch publisher Dow Jones.
And as all of readers know, the Grayscale fund, the largest bitcoin investment vehicle on the planet, which boasts a roughly $27 billion market value as of Tuesday’s close, isn’t an ETF—far from it. ETFs can be bought and sold like stocks and offer transparent pricing. Grayscale is a closed-end product akin to a mutual fund and it has aspirations to convert to an ETF, but it isn’t there yet.
It isn’t clear what happened on the FactSet data platform but the error has since been fixed but for at least a day or so, Grayscale’s wish of being an ETF became a reality .
No TLC for TLT
It is no secret that Treasurys, similar to stocks these past few weeks, have had a turbulent ride. However, the folks at Bespoke Investment Group make the case that plain-vanilla bonds are experiencing volatility that one would normally associate with equities, not bonds that promise stability due to their steady cash flows.
Gauged by the popular iShares 20+ Year Treasury Bond ETF /zigman2/quotes/206026314/composite TLT +1.33% against the SPDR S&P 500 ETF Trust /zigman2/quotes/209901640/composite SPY -1.70% bond volatility is reaching extreme negative levels. The folks at Bespoke put it this way. “Since 2002, in fact, there have only been three other periods where the spread was at similar or more extreme levels,” referring to a measure of the spread between daily moves for the SPY versus TLT going back to 2002.
“When the readings are positive, it indicates that SPY has been more volatile than TLT, while negative readings indicate that TLT has been more volatile than SPY,” Bespoke writes (see attached chart).
That’s so meta
What started as a much-maligned name-change by Facebook Inc. , aka Meta Platforms Inc., has turned into a dash for investor cash. Bloomberg writes that ETF providers are rushing to create metaverse funds offering exposure to virtual-reality related enterprises after Zuckerberg referred to that nascent segment of internet technology as “the next frontier.”
So far, there is the $830 million Roundhill Ball Metaverse ETF /zigman2/quotes/205064656/composite META -1.16% , which launched back in June and the smallish Fount Metaverse ETF /zigman2/quotes/230600814/composite MTVR -0.47% , which kicked off in late October.
Now, First Trust Advisors LP recently filed to launch the Indxx Metaverse ETF, and Bloomberg estimates, citing industry analysts, that the metaverse market will reach around $800 billion in two years, boasting annual growth of 13%.
“Asset managers are increasingly looking to long-term thematic strategies where they can provide a unique approach and often charge a premium to more traditional index based ETFs,” said CFRA’s head of mutual fund and ETF research Todd Rosenbluth.
“There are more than 200 thematic ETFs managing $135 billion in assets,” he notes.
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OIH
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BLOK
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REMX
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SPY
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META
