At the ETF Think Tank, we strive to educate investors on the benefits of the ETF structure. As our ETF Professor Dan Weiskopf (@ETFProfessor on twitter) would say, “structure matters,” and the transparency of the ETF wrapper is the key to understanding the structure of investments packaged in ETFs. This week, we explore one of the most powerful marketing components of the ETF ecosystem: the Ticker. The ETF Ticker can become synonymous with the name, and imply the promise of growth or exposure. Ironically, the ticker is subject to far less regulatory scrutiny then the ETF name, which explains why looking under the hood is even more important with catchy, intelligently chosen tickers.
We had two things inspire us to write about “ETF Ticker Premium.” First, our partners at SoFi won best new ticker at the ETF.com awards for TGIF, the Sofi Weekly Income ETF. Second, we saw a strange phenomenon over the last couple of weeks where a fixed income ETF, previously known as PIFI, changed its ticker to BTC. The impact was documented by fellow ETF Nerd, Nate Geraci.
Under the Hood
Throughout the 30-year history of ETFs, the ticker premium has been very evident. Similar funds in name and strategy can have very different assets, which is usually attributed to either performance or the ticker. For issuers, the ticker is a powerful tool that can convey intent in just three or four letters. For investors, the ticker can be concise, whimsical, or a trap. At the ETF Think Tank, we urge investors to embrace the transparency of the ETF structure, look beyond the ticker, and remember that structure matters.
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