Smart money, crowd intelligence and AI – ETF Stream

Welcome to the qualifying round of the 2022 US Investment Olympics.

The goal of the games is simple: beat the S&P 500, either by generating higher returns or playing dirty and going for higher risk-adjusted returns.

Let the games begin!

Qualification

Like the 2022 Winter Olympics in Beijing, the US Investment Olympics are not easy to qualify for. Mutual funds are automatically barred from participation. Their fees are just too high for them to have a realistic shot against the S&P 500. Hedge funds have even higher fees and theoretically should be hedged, so they cannot compete with the stock market either. In fact, the only securities capable of matching the index are ETFs.

So far, there are eight ETF contestants representing three themes:

Although less expensive than the average mutual or hedge fund, the ETFs have fees of 64 basis points (bps) and are not cheap compared to low-cost index trackers. But then again, top-notch performance is not free.

Despite their contemporary themes, our ETFs have yet to resonate much with the investment community. Their cumulative assets under management (AUM) are only $700m, even though some have track records going back to 2012. But then again, who doesnt love cheering for the underdog?

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Smart money, crowd intelligence and AI - ETF Stream