Jeremy Schwartz: Exploring ETFs - [Making Markets, EP.4]

My guest today is Jeremy Schwartz. Jeremy is the Global Chief Investment Officer at WisdomTree. Before joining the group in 2005, he was the Head Research Assistant for Professor Jeremy Siegel and has helped co-author a number of books and papers with him over the years, including his popular "Stocks for the Long Run" book.

Since joining WisdomTree, Jeremy has been instrumental in developing their world-renowned ETF expertise, and that is the focus of our discussion today. We break down the investment wrapper, explore why some ETFs have become massive and learn why they aren't as popular in fixed income. Please enjoy my conversation with Jeremy Schwartz.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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(00:01:47) - First Question - A summary of Jeremy’s paper he wrote with Professor Siegel

(00:04:31) - An explanation of how the S&P committee adds companies to their list 

(00:05:59) - A hypothesis on passive investing and its pros and cons for the S&P

(00:07:51) - What investors do when a company hits zero

(00:09:40) - The 7 market cap companies and how they impact the index  

(00:10:47) - A snapshot of WisdomTree and its business

(00:12:53) - The 2006 competing products and SEC’s resistance to ETFs  

(00:15:09) - How a create /redeem system works 

(00:18:06) - The definition of a simple ETF basket is

(00:18:53) - How banks avoid taxes when transferring equities

(00:20:16) - Jeremy’s strongest argument against ETFs

(00:21:58) - How authorized participants make money from ETFs  

(00:23:11) - The early push backs of ETFs 

(00:25:02) - Index rules and who can post performance

(00:27:17) - A breakdown of CRSP (Center for Research in Security Prices??)  

(00:27:45) - The pros of self indexing and capitalizing on the ETF market

(00:28:57) - The reason why fixed income ETFs haven't shared the similar growth of other ETFs

(00:30:46) - The bond market and its major flaws

(00:32:20) - Common themes of successful products

(00:36:51) - Similar themes of products that do not work out 

(00:38:41) - Where the Bitcoin ETF stands today 

(00:40:14) - Which ETF providers will have access the the Bitcoin ETF  

(00:43:18) - When the Bitcoin ETF might be available 

(00:43:33) - The likelihood of non-bank providers stepping in to provide Bitcoin ETFs

(00:44:22) - How providers find out and ETF has been approved

(00:44:54) - Jeremy’s most popular tweet is

(00:45:27) - Alternative data sets and why they are important  

(00:47:49) - The distribution of mortgages and how many people do not have them 

(00:49:45) - Professor Siegel's view on the market

(00:51:40) - Where Jeremy thinks we are in the cycle

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