ETF Edge, January 17, 2024

Bitcoin ETF Trading and Options

• Bitcoin ETFs have launched with big volume
• The ETFs are accurately tracking Bitcoin
• Options on spot Bitcoin ETFs are the next logical step
• CBO has filed with the SEC to list options on these ETFs
• When options become available, more hedge fund players may enter the market and chase the top Bitcoin ETFs with the most volume

Impact of Options on Bitcoin

• Options trading on Bitcoin may increase retail and institutional investment
• Zero DTE options (options with zero days to expiration) may become popular
• Zero DTE options trading could involve more money chasing the top Bitcoin ETFs with the most volume, such as the iShares product I-bit
• Bitcoin prices may see more volatility due to increased options trading

Summary of ESG ETFs

• ESG (environment, social, and governance) ETFs have had significant popularity
• TCW believes that ESG data should be used as underlying data for investment processes
• The industry made a mistake by creating ESG products rather than using ESG data for investment strategies

Proxy Voting in ETFs

• The Transform 500 ETF engages in proxy voting and dialogue with management
• TCW believes that proxy voting should be used to drive long-term outperformance for companies
• The ETF voted against management in 84% of proxy votes

Supply Chain Transformation ETF

• The Supply Chain Transformation ETF focuses on the onshoring trend in the US
• Companies involved in the supply chain transformation include railroads, infrastructure builders, and storage solution providers
• The ETF invests in companies that are involved in the buildout of onshoring facilities
• Onshoring is driven by the need to address global supply chain issues, geopolitical concerns, and security issues related to semiconductors and pharmaceuticals

Outlook for the ETF Market

• Dave will provide his thoughts on broader ETF trends for 2024 in the ETF Edge podcast