Inside ETFs 2022 Review: Single Stock ETFs and Bitcoin

[ad_1]

It was another banner year for ETFs in 2022, with launch numbers on track to beat the 2021 record (early December), and assets continuing to move more in their favor relative to mutual funds. In fact, this year has seen a $1.5 trillion gap in asset flows from mutual funds to ETFs, compared to $950 billion last year.

Among the launches this year was a slew of single-stock ETFs, which track the performance of a particular stock instead of tracking an index. Although the idea may sound intriguing, financial advisors have been quite critical of them, urging clients to stay away.

These should be avoided like the plague for the families we serve, said Vance Barse, wealth strategist and founder of Your Dedicated Fiduciary.

These are generally expensive. They can be remarkably volatile, lack diversification and are well outside our clients’ risk tolerance and investment objectives, he said. And when I think about it, the road to Hades is often paved with good intentions, and for our clients, the best thing to do when it comes to these types of leveraged derivatives, may simply be to avoid the heat.

In addition to single-stock ETFs, there was also a lot of hype in 2022 around a long-awaited Bitcoin ETF. While Bitcoin futures ETFs have been launched, the SEC has repeatedly stalled this year and denied attempts by several asset managers to launch a spot Bitcoin fund.

In fact, Grayscale Investments became so frustrated with the SEC that it filed a lawsuit against the regulator, calling its decision to refuse its offer to convert its $12 billion Bitcoin spot trust into an ETF finicky and discriminatory.

“The test that the SEC has applied to Bitcoin-related ETFs, and only to Bitcoin-related ETFs, is flawed and has been inconsistently applied with particular harshness to spot Bitcoin ETFs, the company argued.

There’s more to come on both fronts, but click through this slideshow to follow WealthManagement.com’s coverage of the launch of single-stock ETFs and the battle to get a Bitcoin ETF off the ground.

[ad_2]