On this week’s episode of ETF Prime, it is time to hear all about the annual ETF State of the Union from Head of iShares Americas at BlackRock, Armando Senra. But first, host Nate Geraci is joined by ETF Trends CIO and Director of Research, Dave Nadig, to recap Camp Kotok. Later on, Toroso’s David Dziekanski puts his focus on two SoFi ETFs.
The ETF State of the Union is concerned is all about having a knowledgeable guest to discuss how things are going in the industry, where things are with it, and where things are going. Senra does just that, with talk of opportunities, challenges, misconceptions, and more. As President of the iShares board, Senra has a lot to cover, from record ETF flows, ESG, active ETFs, and thematics.
First up, however, Nadig speaks with Geraci about Camp Kotok (which took place in Maine), where some of the smartest economic minds gathered to discuss the industry from various angles over wine and fishing excursions. But aside from the relaxing sport, Nadig explains, in detail, the nature of this Cumberland Advisors-sponsored event.
With a diverse crowd of economists, Nadig walked away with plenty of highlights. A key topic was the effect of COVID-19, which ranged from discussions concerning the science behind the virus to trying to understand what the economic future will look like.
Nadig states that “what I walked away with was how little we know and how little we can predict with any confidence about the longer-term impacts of this event that we’re still going through.”
A New World Trajectory
However, Nadig does believe it’s a fat-tailed world. Nadig can see the market heading both up and down. Still, labor is something to look at in terms of very narrow specific things about the investment world. Most of the unknowns about the global economy come down to the human impact of this virus, which brings into focus matters such as labor availability in the healthcare field.
“There are narrow pockets like healthcare where you can say there’s going to be a labor reset, if nothing else, and possibly sustained labor inflation,” Nadig notes.
As far as the longer-term implications for labor and the working-from-home effect, Nadig explains how the big question comes down to whether there will be a reset or sustained inflation. Years from now will show what the actual effect was and where things took a turn.
Keeping that in mind, if labor were to go on an extended tear of repricing throughout the global economy, the implications could be greater than a one-time reset in the labor market. Both would be great from an income and a quality perspective.
Still, while these are positives, Nadig also cautions: “We need to be careful of those pockets where we’re going to have problems for a sustained period of time. Global shipping, healthcare – these are places where we’ve got long-term impacts that are not just going to bubble through in a month or two. It may happen in a year or two, but they’re not coming real quick.”
Later in the show, Geraci spoke with Toroso Portfolio Manager David Dziekanski about the SoFi lineup of ETS. In particular, this discussion focused on the SoFi Social 50 ETF (SFYF), which holds the 50 most popular stocks on the SoFi platform. The rise of the retail trader and social investing has been big for 2021, which plays well with SFYF.
The other fund is the SoFi Gig Economy ETF (GIGE), which holds onto companies that have really benefited from on-demand workers who are leveraging digital platforms. This has, of course, experienced a shift given the pandemic.
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