Opinion
Lydon: ETF Industry Misses the 'Rock Star' Manager Culture of Mutual Funds
“It wasn't just making money, but you're backing a horse. And that's something I think, you know, with the ETF industry, we're missing today.”
Prediction Not checkable as stated
Lydon: Self-directed ETF investors will likely panic sell in downturns
“And as far as self-directed investors who have invested in ETFs, maybe through robo-advisors and that type of thing, are they gonna stick with it? They should. We know historically they should over time. Are they going to? Probably not, right?”
Prediction Not checkable as stated
Lydon: Active managers will prove value by protecting against market declines
“So we're not really yet in a period where active management can really show its worth, but I think we're going to be getting there, and that's really going to get us more back to full circle, where active managers are going to come in. They can show that maybe…”
Opinion
Lydon: Fixed Income ETFs Have Improved Bond Market Price Discovery
“Because there's more liquidity in the ETF space, we've seen better price discovery because ETFs have come into the marketplace.”
Assertion Not checkable as stated
Rob Arnott Keeps 50% of His Personal Portfolio in Emerging Markets
“Somebody like a Rob Arnott, that I talk to on a regular basis, who personally has, 50% of his individual money in emerging markets, and said, you just don't see valuations like this, with P ratios around 12 right now.”
Assertion Supported
Lydon: 1990s fund companies used custodians to ban short-term market timers
“If a fund company knew you were coming in and putting twenty million dollars, and then you were selling it six months later, they would actually work with the custodian. The custodian would say, they don't want that type of money, so you no longer can buy that…”
Insight
Advisors Using Pure Index ETFs Must Own Their Bear Market Losses
“So during the next bear market, if you don't have a plan in place, you can't point to the indexes. You're gonna have to take it on the chin yourself.”
Disclosure
Google is the Number One Research Tool for ETF-Focused Advisors
“We do a study every year entitled how to communicate with ETF-centric advisors, and we ask them not only how they want to be communicated with, but how do they get their research. Their number one research tool is Google.”
Disclosure
Tom Lydon Bought XIV ETN Right Before the 2018 Volmageddon Blowup
“I actually am one of those knuckleheads that actually went in and bought that thing in the final hour”
Assertion Partly supported
Jeffrey Gundlach's Active ETF Holds Over 50% in Mortgage-Backed Securities
“I mean, you look at Gunlock, he's got a great portfolio,
But he's got over 50% in mortgage-backed securities, right?”
Prediction Not checkable as stated
Lydon: Long/short equity ETFs will probably show alpha in next 3-5 years
“On the equity side, as well.
Long, short.
We'll probably have a period of time in the next three to five years where it might be able to show some alpha.”
Assertion Not checkable as stated
Lydon: Asset managers pay premium valuations to acquire established ETF shops
“We're seeing a lot of M&A going on in the space already. There are a lot of managers who were late to the game, and rather than create it themselves, they'd want to go in and buy somebody. So it's hot right now, and managers are paying premium prices For estab…”
Assertion Supported
Lydon: 95% of ETF marketplace remains index-based
“Still, to this day, 95% of the ETF marketplace is index-based.”
Assertion Supported
Lydon: U.S. ETF assets grew from $650B in 2009 to $3.7T
“So in U.S., 3.7 trillion, which just at the end of the financial crisis in oh nine was about six hundred and fifty billion.”
Assertion Supported
Lydon: Top 100 ETFs hold nearly $2T in pure beta strategies
“Almost two trillion dollars is in the top 100 ETFs. So right now they're about 2200 ETFs and we're adding more every day. But the top 100 ETFs, two trillion dollars, still pure beta strategies.”
Assertion Supported
Lydon: Smart beta fees are down to nine bps at Goldman
“You can get a smart beta strategy at Goldman for nine basis points. You have pure beta strategies now for four.”
Assertion Supported
Cathie Wood's ARK Invest Quickly Reached $5B AUM by 2018
“In a short period of time, they got five billion under management.”
Assertion Supported
Lydon: ETFs account for one-third of daily trading volume on high-volume days
“When you look at high volume days on the exchange and people talk about it, ETFs account for one third of the daily asset trading, right?”
Assertion Supported
Lydon: Very few of the 2,000+ ETFs pay year-end distributions
“Even with over 2000 ETFs that are out there, how very, very few have year-end distributions.”
Assertion Not checkable as stated
Lydon: Trading volume in inverse and leveraged ETFs has tripled
“Even though the asset growth in inverse and leverage ETFs haven't really kept up with overall asset growth in ETFs in general, it doesn't matter because when you look at the underlying volume, it's tripled.”
Assertion Supported
Lydon: Fixed Income ETFs Hold $700B Compared to $4T in Mutual Funds
“First of all, there's about seven hundred billion dollars in fixed income related ETFs. There's probably four trillion dollars in fixed income mutual funds.”
Assertion Contradicted
Barclays Agg Credit Rating Dropped and Duration Doubled Since the GFC
“The Barclays Ag is not the Barclays Ag that it was at the end of the financial crisis, right? So the credit rating, Is a lot less today than it was back then, number one. Duration is doubled since that period of time.”
Assertion Contradicted
Lydon: ROBO Global ETF grew from under $100M to $3B in one year
“There's a robo-global that had been around for five years, hung under a hundred million dollars, and then all of a sudden people got it.
And now they're at three billion, you know, in an, in another year.”
Assertion Not publicly verifiable
401(k) Plans Drive 75% of Mutual Fund Inflows at Fidelity
“Out of every dollar that goes into fidelity mutual funds, 75% go in via for one K plan.”
