Constructing ETFs with Kip Meadows - PLUS the Panel Talks Marijuana Stocks

Money Tree Investing

Money Tree Investing Podcast

Stockmarket, Valuestocks, Investing, Finance, Passiveincome, Wealth, Business, Personalfinance

4.6 • 658 Ratings

🗓️ 30 November 2018

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Kip Meadows joins us to talk about how ETFs are constructed.

He explains that an ETF is a type of mutual fund that trades like a stock. While mutual funds aren’t technically traded until the end of the day, ETF transactions can be conducted during intraday trading.

“They’re organized in a structure that allows buying shares in an underlying portfolio. That's why you go through an exchange because you have to to go through a broker dealer in order to purchase an ETF. The broker-dealer will purchase the shares in the underlying ETF and the broker-dealer is who keeps up with how many shares you own. The broker-dealer then handles the accounting to show you how many shares you own - which is different than an open-end fund where the transfer agent for the open end fund directly carries your shares at the fund.

They're created the same way as any sort of registration with the Securities and Exchange Commission - you have to file the registration to become effective, and once it’s effective then you can purchase those shares through the broker-dealer.”

Then our panel gets into a discussion about alternative medicinal ETFs and who’s getting into marijuana stocks.

For more information, visit the show notes at http://moneytreepodcast.com/219

Transcript

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0:00.0	Welcome to the Money Tree Investing Podcast.
0:04.0	Stock market, wealth, personal finance, value stocks, invest in your life.
0:10.0	Welcome to this week's episode of the Money Tree Investing Podcast.
0:14.0	Today we have Kip Meadows to talk about ETFs.
0:17.0	But first, speaking of ETFs, if you are looking for a better way to invest, try betterment.
0:24.3	Betterment is a robo-advisor that uses ETFs to put together a portfolio that fits your goals and your risk tolerance.
0:32.9	Head on over to moneytreepodcast.com slash betterment to learn more about how you can invest a better way.
0:41.0	And now that we've got that done, let's go ahead and move into our interview with Kip Meadows.
0:46.9	Today, we are interviewing Kip Meadows from Nottingham. He is an ETF expert. So we're going to talk to him.
0:53.9	Welcome to the show
0:54.7	Kip. Thank you. Thanks for having me. A lot of people have been hearing about ETFs lately. I know
1:00.0	they're not a super new investment, but they've kind of risen to the top of the national consciousness
1:06.4	in the investing world, thanks to robo advisors. Could you give us a top-level view of, like,
1:11.9	what is an ETF?
1:14.0	Sure.
1:14.7	Well, an ETF is a mutual fund.
1:16.8	It's a type of mutual fund.
1:18.3	Of course, mutual funds have been around for almost 80 years now.
1:22.5	And ETFs is a derivation of that that is really, I guess, in the last maybe 15 years, I don't know
1:29.2	the exact date when the first ones were organized.
1:32.3	The difference between an open-end fund is what some people call it a traditional mutual
1:37.1	fund and an ETF is that an ETF trades like a stock.
	...

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