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  • New Brazil Mid Cap ETF Indicates It's Time to Short [View article]
    Yup, that makes sense: by providing access to a broader range of investors, ETFs may exacerbate money flows and asset price movements due to sentiment - particularly because the investment decisions of retail investors may be more affected by sentiment.

    One thing to look at, consistent with your thesis: maybe the closure of ETFs is a strong indicator for a bottom in sentiment. Again, you'd have to look closely at the asset class and why the ETF was being shut down.
    Jun 24 04:42 PM | 1 Like Like |Link to Comment
  • New Brazil Mid Cap ETF Indicates It's Time to Short [View article]
    Brett,

    I love the contrarian thought process here. However, some ETFs (such as the first gold ETFs) generated significant inflows into the underlying asset class, to the point that they raised the price of the underlying assets, which made the success of the ETFs self-fulfilling.

    For your contrarian strategy to work, you need to be sure that the ETF doesn't fall into this category. Perhaps the key factor is whether there is significant pent-up demand for the asset class that the ETF will unleash.

    My guess is that the new Brazil ETF doesn't fall into this category.
    Jun 24 09:29 AM | 1 Like Like |Link to Comment
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