
The One-Man, $1.2B ETF Shop - qCOVET
http://www.bloomberg.com/news/articles/2015-08-26/how-a-one-man-etf-shop-attracted-1-4-billion-in-just-8-months?cmpid=twtr1
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hkmurakami
Here were the takeaways from a discussion I had with a friend about this.

    
    
      Initial setup is likely cumbersome but straightforward.
      Marketing is where all the effort is.
      The sector you choose has to outperform, which you have little control over.

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m-i-l
Not to mention:

 _That’s the dirty secret of the ETF industry. All of the innovation has led
to a lot of failure... The bottom line: Most ETFs live in oblivion._

Like many other areas, you tend to only hear about the success stories, and
are unaware of the scale of the non-successes.

~~~
roymurdock
From the article

> _81% of funds account for 2.4% of dollar volume._

So the top 20% see 97.6% of all trading, probably with the top 10% seeing 90%
or so. The ETF industry is a bit more brutal than the 80/20 rule of thumb.

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jakozaur
This guy is awesome. We should have more that kind of funds. 0.75% yearly
expense ratio: [http://www.etf.com/HACK](http://www.etf.com/HACK)

The whole finance could be disrupted if funds will charge less and less for
commission. I believe anything over 1%/year is ridiculous high. Fundamentally
there is little reason why we couldn't have active funds for the price of
ETFs.

Self index ETF seems to me like low cost active funds with open-source public
investment thesis.

~~~
joosters
0.75% TER is still far too high (like, charging at least three or four times
too much) for something that is a passive index.

Many indexes are 0.15% and under.

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PhantomGremlin
Yes, too expensive.

This article was posted a few hours earlier, and I pointed out that ETFs like
SPY and VOO are much cheaper, 0.09% and 0.05% respectively.
[https://news.ycombinator.com/item?id=10123060](https://news.ycombinator.com/item?id=10123060)

~~~
cowsandmilk
Buying HACK is to invest in a particular industry. SPY and VOO don't track an
industry, they track large us companies.

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kitd
_... because ETF shares are created and redeemed in kind and thus almost never
produce capital gains for shareholders._

Could someone explain this to me? What kind of 'kind' are we talking about?

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cs702
Here's a good explanation: [http://www.etf.com/etf-education-center/7540-what-
is-the-etf...](http://www.etf.com/etf-education-center/7540-what-is-the-etf-
creationredemption-mechanism.html)

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roymurdock
I see a parallel here between tickers, which are extremely important given a
fledgling ETF's reliance on marketing, and domain names.

Could an ETF company hypothetically squat on valuable tickers such as HACK,
DATA, BDAT, GEMS, etc.? Not sure it would be worth the costs to do so, but I'm
curious nonetheless.

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acconrad
There was just recently a Business Insider post on a one-man billion dollar
startup.[1] Here it is!

[1] [http://www.businessinsider.com/is-a-one-man-billion-
dollar-s...](http://www.businessinsider.com/is-a-one-man-billion-dollar-
startup-on-the-horizon-2015-5)

~~~
shalmanese
Except it's really a $9M startup since it's only seeing 0.75% of that $1.2B.
Still very good for a single person business but not media worthy.

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pbreit
Looks like active managers are finally figuring out what to do: behave like
passive managers. Pick a bucket of stocks, publish it, invest in it, calm
down.

~~~
qCOVET
That is exactly it. After reading the story, I have been thinking about this
and how easy it is to create weighted-buckets of different companies, give it
a cool name and launch.

Cripto-currency ETF would be awesome .. when a few of these bitcoin companies
start to trade publicaly.

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NickHaflinger
WTF !!!

