Throwing Wet Paper Towels Against the Wall

Jon Blogosphere, Government, Market Commentary

There are currently about 2,000 ETFs in existence. Many of them are useless.
This isn’t new to you – many of you who answered my ETF survey said there are just too many.
Sample Response 1: ‘There are so many ETFs that choosing an ETF mix is now as difficult as choosing individual stocks and other assets.’
Sample Response 2: ‘Every Tom, Dick and Harry has formed one for something.’
Some people think there is an ETF bubble, because of all the stupid ETFs that are coming out. When a fund like WSKY (Spirited Funds/ETFMG Whiskey and Spirits ETF) appears on the scene, it’s safe to assume that the top is probably in. Right?
Actually, that is not the case.
Incentives
The thing about ETFs is that they are much cheaper to launch than a traditional open-end mutual fund. It still costs money – in the six figures – but I know rather ordinary people who have done it.
It’s a lot of work navigating the regulations, working with an index provider, getting people to make markets – but it’s just sweat equity. There simply is not a lot of overhead.

This post was published at Mauldin Economics on SEPTEMBER 28, 2017.