I was pleased to co chair the ETF 360 Conference on October 21st in New York. It was hosted by Financial Planning, On Wall Street and Bank Investment Consultant magazines and was geared toward financial advisors. This conference had an outstanding list of contributing speakers as well as informed financial advisors in the audience. Perhaps that’s why the event was sold out. Here are some of the highlights of the conference:
Professor Jeremy Siegel kicked off the conference with a compelling case that U.S. equities are currently undervalued to the tune of 20 to 30%. His presentation was chocked full of insightful historical data, comparing equities, bonds and t-bills. As a benefit to conference attendees, everyone received a copy of his presentation.
The two morning panels were Using ETFs to Hedge Portfolios and Alternative Investing in Commodities and Currencies. The hedging panel showcased a variety of hedging tactics investment managers are employing today through the use of long ETFs, leveraged ETFs and ETF options. It was interesting to learn specific strategies the panelists were using including hedging Gold exposure and capitalizing on the performance differences between developed and developing markets.
The luncheon keynote was delivered by Professor Burton Malkiel and it focused on his overall economic outlook as well as a long term bullish case for Chinese equities. Professor Malkiel believes that equity markets are reasonably valued worldwide. He passionately believes that most investors are underexposed to the Chinese stock market as China makes up less than 2% of investors’ allocations. In comparison, China’s share of worldwide GDP is between 7% and 13% depending on how the value of the Chinese Yuan is represented. (official exchange rates vs. purchasing power parity) Like Siegel, Malkiel delivered a wealth of supporting data that was provided to conference attendees in handout format.
Three afternoon panels covered Leveraged ETFs (or as I like to call them “Geared”) , Appropriate Investor Benchmarks and Emerging Markets. The panel on Leveraged ETFs provided plainspoken advice on using these controversial products. For example, three aspects to examine before purchasing a leveraged ETF: the index, direction, and magnification.The emerging market panel outlined the opportunity that many of the new more focused emerging markets ETFs offer. The panel compared the growth in product offerings in this space to the US focused ETF market, as it evolved from well known benchmarks to style, cap and sector ETFs.
ETF 360 provided a variety of valuable insights into ETFs, market opportunities and investment strategies advisors can implement in their practices. A special thank you to all our panelists and attendees for making this event a success.