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1) ETF Inflows Shoot Past 2020’s Full-Year Record Total

Financial Times  |  9/10/2021

Because… While the global ETF sales record was broken in August, U.S.-listed ETFs garnered more inflows than last year’s total in July. It is worth noting that flows into U.S. ETFs already surpassed $600 billion in early September, which was remarkable considering the $500 billion mark was hit a little more than a month ago. Based on FactSet data, three out of four major asset classes posted more YTD sales than last year. U.S. Equity raked in $288.9 billion as of September 10, 2021, 74.7% more than its 2020 intake of $165.4 billion. International Equity collected $165.1 billion, more than doubling its 2020 inflows of $72.4 billion. International Fixed Income absorbed $28.3 billion, compared to a net $25.5 billion throughout 2020. U.S. Fixed Income was the only major asset class that has yet to reach its 2020 total. It raised $117.6 billion, accounting for 63% of last year’s inflows. At the current pace, we estimated 2021 sales could fall between $850 billion and $900 billion. The projection of $1 trillion as some industry analysts made at the beginning of the year seems a tall order.

2) Debate: Do Cryptocurrencies Belong in Retirement Accounts?

Bloomberg  |  9/14/2021

Because… The debate is interesting because it helps gain a better understanding of cryptocurrencies. We maintain our stance that it is too early to put digital assets into retirement accounts. The cryptocurrency industry is not mature and has remained largely unregulated despite the increasing acceptance from corporations and financial institutions. The SEC, after postponing its decisions several times, has yet to issue an approval for a crypto-linked ETF. If the SEC still has reservations about the suitability of bitcoin as an underlying asset for an ETF, we do not think offering it in a retirement account would be appropriate. Cryptocurrencies are also notorious for their heightened volatility. Most investors do not have adequate knowledge about what blockchain is, how it works, and how the nascent asset class fits into a portfolio. Many individuals trade bitcoin for speculative purposes, hoping to make quick profits without truly understanding the sophisticated technology involved. With such a mindset, they will not be able to handle the high level of risks and protect themselves from potential losses.

3) Ark Drops Out of Top 10 ETF Issuers as ‘Shiny’ Lure Fades

Bloomberg  |  9/14/2021

Because… News articles like this are eye-catching, but they could do more harm than good. Performance-chasing investors would want to head for the exit, assuming Ark is a sinking ship. Ark, on the other hand, would appear to be a loser, although its asset ranking only dropped to 11 from 10. In fact, Ark remains the largest active ETF provider. It offered just eight funds at the end of June when Ark was the 10th largest ETF sponsor. In comparison, the number of ETF offerings from the other nine largest players ranged from 366 at iShares to 26 at Schwab. Despite the small number of ETFs, Ark was the ninth best-selling ETF sponsor. Its inflows of $13.5 billion this year through August accounted for 30% of its assets of $44.7 billion. WisdomTree, which surpassed Ark in August with assets of $46.0 billion, had YTD sales of $2.8 billion. The media coverage of short-term fluctuations in rankings or performance is detrimental, potentially leading the investing public to lose sight of the grand scheme of things and make irrational investment decisions.