Bryan Armour

[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing.

Every day, I'll be joined by guests from across TD, many of whom you'll only see here.

We're going to take you through what's moving the markets and answer your questions about investing.

Coming up on today's show, we are going to take a look at the growth of the active ETF market and what investors need to consider if they are looking into the space. MorningStar's Bryan Armer joins us.

MoneyTalk's Anthony Okolie is going to have a look at a new TD Economics report on challenges facing the middle class.

And today's education segment, brightness will show us how to research ETFs on the platform. And here's how you get in touch with us.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

Before we get our Guest of the day, let's get you an update on the markets. We will start you at home on the TSX Composite Index. After a shaky week last week, we have green on the screen on Bay and Wall Street's for this Tuesday trading session.

Here at home, 125 points or 1/2 a percent gain for the TSX. Among the most actively traded names include gold names. There is a big pullback in the price of gold yesterday. 70 bucks per pounds. Barrick's not as firm as it was earlier in the session but it is studying after yesterday selling pressure, about 1%.

BCE on the move higher as well. The telecom giant in Canada, the stock has been down and to the right throughout the past years so bit of a bump today. At 3334, that would be the New York listing, American bucks, up 1.8%. South of the border, let's check in on the S&P 500.

Today, it's adding nearly 51 points or about a full percent. We are in the thick of earnings season south of the border, investors digesting and sifting through those reports. Let's check in on the tech heavy NASDAQ. Tech was the problem last week in terms of the selling pressure more broadly, it's up almost 1.5%. 221 points on the board.

Not a tech name, General Motors out with its latest quarterly report.

We will tell you a little bit more later on the show. The market likes it.

You're up 4 1/2%.

And that's your market update.

Traditionally, many exchange traded funds were passive instruments that were tracking an index, but today, there is a growing number of ETFs being actively managed.

What should investors be keeping in mind when they are looking at the space?

Joining us now to discuss, Bryan Armer, Dir. passive strategies research for North America with some Morningstar Research.

Great to have you back on the show.

>> Great to be back, Greg.

>> Let's talk about this growth that we've been seeing in actively managed ETFs.

What's driving this?

>> Active ETF's are at the centre of several different trends. Investors have broadly moved out of mutual funds and into ETFs over the past decade. Investors and advisors are more sensitive to things like fees and taxes than ever before, which really gives active ETFs a leg up over there mutual fund siblings. People like the transparency of ETFs, which ETFs come with clear fees, daily reported holdings in most cases. Active ETFs are growing rapidly while there active mutual fund siblings are seeing substantial outflows.

In many ways, I see ETFs as the future of active management and the move to ETFs is in an early stage globally but no market has responded like the US ETF market to the trend. The reason is US investors get the best tax treatment from active ETFs, in-kind creations and redemption process.

For example, in 2023, 61% of US equity mutual funds are distributed capital gains versus just 2% for US equity ETFs.

The catalyst that really set things off of the last five years was the SEC's approval of the ETF rule in 2019 which made it easier for asset managers to get ETFs to market. Also it allowed for the custom creation redemption baskets which gave the ability to negotiate the basket of securities to be exchanged for ETF shares one authorized purchasers had redeeming shares.

This provides major leeway for handling outflows in a tax efficient manner. It has almost worked as an advance portfolio management tool as well. The number of active ETFs and assets under management have exploded since the passage of the ETF rule going from 70 billion in 2019 to over 600 billion as of the end of March.

>> That's a lot of growth there. You mentioned some of the things that are attracting investors to actively managed ETFs. What about some of the cons here, what do they need to be aware of?

>> Capacity issues are the one big difference between mutual fund ETFs regarding Saturday.

Unlike mutual funds, ETFs can be closed to new investors. That can be an issue in the fund sizes getting too big, it can start to derail the strategy and fourth portfolio managers to change course when investors would not want them to.

The other con is that there is trading costs associated with ETFs. They trade like stocks, unlike mutual funds. You can trade them throughout the day which is great in terms of flex ability but there is a bid ask spread that investors need to consider and if it's a wide bid ask spread, those trading calls can really add up.

>> Important things to remember there.

When ETFs really started to catch investors attention, one of the things was the lower management expense ratio compared to the mutual funds. When we are getting is actively managed ETFs, what kind of fee structure can we expect Mark >> ETFs are much more simple in terms of fee structure they mutual funds.

The price on the tin is typically the price you are going to pay for an ETF. See transparency in my opinion is an underrated aspect of ETFs.

Asset managers have tended to price fees at similar levels to institutional or retirement class related mutual funds. For everyday investors, that's an easy win.

>> I know you just published a paper on all of this and you actually ran through I think it was four or five considerations.

If someone is taking a look at the space and not familiar, what are the checklist of things to consider when making this kind of decision? Run us through a few of them.

>> Understand what the manager is trying to do. Look at the track record and performance patterns that might fit their style to make sure they are doing what they say they are going to do.

But there are a couple of extra checks for active ETFs.

You can't close the fund or ETF down to new investors.

So make sure that the market is suitable, the strategy is suitable within the market.

A small value ETF could start to get into some trouble in emerging markets like tech ETFs, for example, might run into issues if it gets too big.

Well diversified strategies tend to work just fine in those areas but a concentrated portfolio with just a dozen stocks can really impair their strategy.

Likewise, trading fund costs can derail an otherwise good ETF. Really look at the spread is important ahead of time and always, always use limit orders.

>> Let's talk a little bit about the space. You are saying that as it is growing, actively manage ETF's are attracting more investor attention, what are some of the offerings? How are they constructed?

>> For the most part, they are very similar to what exists in the mutual fund market. We looked at something like active share which compares how much active risk managers taking or strategy is taking relative to its category index.

As an equal weighted average, it's almost the same as mutual funds. But investors have shown an interest in some of the lower active share strategies in particular, investing in those that tend to be better diversified, almost like an active passive hybrid, those multi dimensional fund advisors which is the largest issuer of active ETFs in the US.

>> Interesting self and a great start to the program. We will get your questions about exchange traded funds for Bryan in just a moment's time.

And a reminder that you can get in touch with us any time.

Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.

Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.

Let's talk autos. General Motors is boosting its annual sales forecast, that after delivering an earnings before us most recent quarter.

The Detroit automakers reporting a nearly 8% jump in revenue for the first three months of the year, driven largely by truck sales.

The truck is still pretty popular North America.

GM says consumers have been remarkably resilient despite high borrowing cost. GM is up about 5%.

Shares of music streaming service modify in the spotlight today, up to the tune of 16% what's going on?

Quarterly results came in stronger than expected after a year of cost cutting at the company and those cuts included laying off more than 1/4 of their staff.

Saponify also saying it expects to add some 16 million net new users to their services quarter, that would bring the total, if they hit that, to 631 million monthly active users.

Saponify at $316 per share, up more than 16%. Also want to check in on PepsiCo, says it seeing weaker demand for its products as family struggle with the high cost of living. Now, the beverage and snack giant did manage to beat expectations on the top and bottom lines for its most recent quarter, that was boosted largely by those higher selling prices and then on the flipside, prices hitting consumer demand.

$172 per share, down 2.5%.

Quick check in on the markets.

We will check in on Bay Street first, the TSX Composite Index. We bought some green on the screen.

140 points to the upside, that's good for two thirds of a percent.

South of the border, after that text driven selloff of last week, the losing streak the S&P 500 was on, it snapped the street yesterday and building on it today.

54 points to the upside, up more than a full percent on that broader read of the American market.

We are back with Bryan Armer from Morningstar Research, taking your questions about ETFs.

First one here for you. Someone says hello. Hello back to you. They said hi. So hi right back.

There is a spot Ethereum ETF coming up.

You expected to be as popular as the bitcoin ETFs?

>> First of all, I wouldn't say that I expect imminent approval of spot Ethereum ETF's. It would follow logically that they would be approved but that does not appear to be the case in this round of filing.

When they do come to market, I do not expect Ethereum to be a popular spot bitcoin ETFs but that doesn't mean it won't be successful.

Spot bitcoin ETFs were uniquely hot topic built on a decade of demand.

The futures ETFs have not really gained that much interest. A couple of data points that could give us an indication of what to expect, greyscale bitcoin trust had about $30 billion when it launched an ETF. There Ethereum trust has about 9 billion.

So pretty close to that quarter, maybe 1/3 of the size but perhaps a better indicator would be futures ETFs because bitcoin futures ETFs launched too much more fanfare, which I expect to be a similar situation as spot bitcoin ETFs here.

Data for futures ETFs, ProShares, bitcoin futures ETFs at about $1 billion when talks of spot bitcoin ETFs really started to heat up last year.

And then, there ProShares Ethereum futures ETFs has lists. That's the biggest Ethereum futures ETF on the market. I would guess either spot he Ethereum ETFs would absolute max get to roughly 1/4 of spot bitcoin ETFs but likely much less.

>> Interesting differences there between the two. I recall, he was back in January, when the SEC did allow the trading of the spot bitcoin ETFs. It's not that they approved it, I can read the exact language, perhaps reluctant approval would be a way to frame that discussion.

>> Yeah, I mean, it was really because of a lawsuit that said if you approve the futures ETFs, then there's no reason to deny the spot ETFs.

It looks like there could be that same path of litigation for Ethereum as well.

>> Crypto currency is an interesting asset class but not without risk.

>> Yeah, it's definitely not without risk.

Even a 5% allocation in a traditional 60-40 portfolio really ratchets up the risk of the full portfolio. The volatility of bitcoin compared to US stocks is about five times higher in terms of standard deviation so it's, we have already seen it right off the bat, spot bitcoin ETFs launched in January this year.

They took a nosedive down 50% and then went up 60%, but it's definitely a wild ride.

>> Some important caveats there. Let's take another question on crypto current A's. Someone from the audience wants to know the impact of the bitcoin halving event, what could it have on ETFs? Maybe start off with the halving event for those who are not clear on what's going on.

>> It took place last Friday. For those that don't celebrate this holiday, the halving refers to the amount of bitcoins awarded to minors.

That matters in the sense that for bitcoin ETF specifically because decreased supply in the bitcoin market can create a demand imbalance which could potentially lead to a price increase. Historically, bitcoin halving's have led to supply shocks and strong performance by bitcoin over the following year but last weeks and subsequent halvings could be less impacted because each time the supply is smaller than the past halving and more bitcoin are in circulation so in theory investors should be able to anticipate a known preset reduction in supply and many speculated on another strong performance following the halving so that could lead to let down in terms of performance if it fails to meet expectations.

So last week's halving it is far from a sure win for the speculators.

>> As much as this is sort of a novel asset class, it feels like that old wording to investors: past performance does not necessarily guarantee future performance. It seems to apply in this case we are talking about the halving events.

>> Yeah, absolutely.

>> We are going to jump to another segment.

As always, make sure you do your own research before making any investment decisions.

actually, no, we do have another question on the board.

My old eyes can't keep up. There is another question for you. What sort of ETF would be a good dividend growth over a long time., 10+ years?

>> There are many strategies that specifically target stocks that fit that mould, meaning they have grown their dividends for a predetermined amount of time.

There are indexes that track stocks that have grown their dividends for seven, 10, 20 straight years and strategies for things like dividend depreciation, dividend growth, dividend aristocrats, even quality dividend would probably be safe bets for that.

Often, investors looking for dividend growth are looking for that quality tilt from dividend growers, meaning companies that are financially strong and unlikely to cut future dividends. That often means trading off field for safety but there is this quality paradox, as I have heard GMO collar, it's an oddity where quality stock that have performed really well relative to the rest of the market, but they also come with less risk. We are often taught in finance at higher risk means higher reward but that has not been the case for quality. Point being, dividend growers back into quality and even though yield is lower, the companies are safer, they have outperformed higher-yielding dividend growth strategies recently, and over the long run, and that trade-off means they will continue to grow dividends, spend less and spend more on future growth.

>> We are talking about dividend growers.

I know an individual equities, they will be warned of the dangers of a high dividend yield. At first it seems counterintuitive.

What do you need to be aware of when looking at a high yield?

>> Higher yield typically you are going to be paying out more of your profits to shareholders and so there are a couple of different risks that investors face with that.

Appreciation strategies take a slice of the pie for dividends but the pie continues to grow. High-yield strategies eat the whole pie.

You could risk stagnation, lack of growth in the underlying prices, but there's also the risk of value trap. So if you sort stocks by dividend yield, you can run into these value traps because basically the, you take a trailing yield, divided by current price, if the price has been falling, it makes the Bastille look higher. Then you end up catching a falling knife, so to speak.

>> Interesting stuff and caveats there.

As always, make sure you do your own research before making any investment decisions.

we are going to get back to questions for Bryan Armour on exchange traded funds and just moments time.

And a reminder that you can get in touch with us any time. Just email moneytalklive@td.com.

Now, let's get our educational segment of the day.

Well, we are talking about exchange traded funds on the show today. If you are looking to do more research on different types of ETF's that are out there, where broker has tools which can help. Ryan Massad, Senior client education instructor with TD Direct Investing has more.

>> Thanks, Greg. There are a number of ways that you can search for ETS in web broker, a lot of different things. It may seem a bit overwhelming but let's see how we can narrow the search down. Let's jump into a broker right now. And where broker, we are going to click on the research tab, then, under the investments tab, we are going to go to ETF's. Once we are in there, we are going to have an overview of ETF's and a number of different ways.

This can connect with other parts of where broker the talk about ETFS that allow us to search for ETS. The first thing off the bat is all across this page, you're going to see these Canadian and US flags.

In the top right corner, if you want to switch this to a Canadian or US view, you will do that in the top right corner.

If I wanted to look at the ETF market in the US, I just need to click on this flag.

That will switch all of the features on the site to the US market.

I can switch it back to Canadian at any time.

Each submenu as well will have a Canadian and US flag so I can click on that submenu if I wanted to change things around there.

First things first. If you are looking at categories, there are a number of different ways you can jump in the categories.

You can look at the top-performing categories, for example, we got a chart here on the top left, you can add categories to that chart and it will actually draw out those, the performance of that.

On the right here, we've got movers.

If you are looking at today's movers, the gainers or the losers in dollars or percentages, new 52 week highs or lows in those ETFs, you're going to have a nice list here.

Even here you can see where you would like to screen for. Is it all ETFs? Standard ETFs? Inverse index and so on.

What other section I want you to see here is if I scroll all the way down to the right, this little section here is connected to our ETFs screeners tool that's also available to you in web broker, but you can get to it right from here.

So what you do is you say, okay, I want to screen the market for some ETFs in certain situations, perhaps I would like to include only index ETFs, I would only like for example Canadian and I can go through some of the main categories and quickly search. I can see down here I've got matches, I can click on view matches.

And I'm going to get a nice list of ETFs.

From this list, if I like, I can click on a couple that I might want to compare.

And then hit the compare button. And then, it will bring them up side by side which will allow me to much easier compare each one of them that I wanted to see. If any of these would interest me, all I have to do is go up here to maybe the buy button for any of them, click on by and it will go ahead and bring me to that order entry ticket. So there are a lot of tools here within web broker that will allow you to search for ETS that makes it a little bit easier because the ETF market is a little bit daunting and I would strongly recommend you jump into that ETF section and make things a little bit easier for you.

>> Our thanks to Ryan Massad, Senior client education instructor with TD Direct Investing. For more educational resources, you can check out the learning centre in web broker or you could use this QR code that you are seeing on your screen right now. You will navigate, using this QR code, to TD Direct Investing's YouTube page. We will display the code at the end of the show as well.

Don't worry. It will show up again at the end of the show.

Before get back to your questions on ETFs for Bryan Armour, a reminder of how you can get in touch with us.

Do you have a question about investing or what's driving the markets?

Our guests are eager to hear what's on your mind, so send us your questions.

There are two ways you can get in touch with us.

You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.

We'll see if one of our guests can get you the answer right here at MoneyTalk Live.

We are back with Bryan Armour, take your questions about exchange traded funds.

Another when here for you, Bryan.

If you are saying, some ETFs seem to offer a higher dividend than the underlying stocks in the fund. How come?

>> That's a tough question because I don't know the example the viewer is referring to but there are two ways that I could see that happening.

Number one, ETF portfolios rebalance every so often, like quarterly, annually, for example, so it could be that they ETFs shed some higher-yielding stocks from their portfolio, making the historical yield look higher than the underlying stocks.

The second way is what I previously talked about, trailing yield is calculated by historical dividends compared to today's price so if the ETS price has dropped, it makes the past 12 months of dividend payments appear higher given current prices, so the best practice in that situation would be to look at the total dividends received and compared to the price action of the ETF to get a better gauge of what yield to expect going forward.

>> There are some useful clues for the person who put their question in. Another question now, someone is asking about the risk posed by the growing portion of the markets that are made up of ETFs?

>> Not at all. ETFs are just mutual funds that trade on stock exchanges.

The same fear existed when mutual funds came out in the 1920s or whenever that was at hand ETFs just hold a portfolio of stocks or bonds and whatever else, it does not create any risk itself. In fact, the opposite has actually turned out to be true of bond ETFs. So during market volatility, it's normal for corporate bonds, high-yield bonds, to be very difficult to trade, so the trade over the counter, you need to find a dealer, look for a buyer somewhere and price discovery is poor because few people are trading so it's hard to know what the price should be.

ETFs have added to that liquidity by in price discovery tool by giving investors and portfolio managers the ability to trade all these bonds in one portfolio and in doing that, it's given a tool to add or remove risk without having to trade the individual bonds.

>> When I've heard this criticism in the past before, I feel like people have associated it with passively managed to ETFs.

When we talk about actively managed, would that get even more hands into the market?

>> It absolutely could have an impact.

Active managers might be slower to respond. You can see prices may be a little slower if there is a greater number of percentage of assets and passive strategies. The one thing I will say though is that if there is a greater share of passive ETFs or passive funds generally, then the active managers should have more of an influence, a smaller number of managers should have more of an influence and that should almost thin the herd so that the best active managers, the ones that are really good at what they do, at identifying pricing, can have an impact on the underlying stocks.

>> Interesting stuff. Another question here about artificial intelligence. Of you are wondering how you can play AI using ETFs?

>> There are many ways. So it comes down to what approach you want exposure to for AI. In some ways, people want picks and shovels. If you go back to the old days, the picks and shovels, right, who was actually giving the tools to provide AI like Nvidia, for example, would be a perfect example.

You could also look at mega-cap tech companies, Microsoft, Amazon, Apple, all of those sorts of companies that might be leaders in AI but obviously derive a significant portion of the revenues elsewhere. And then there's also smaller companies with higher portions of AI exposure meeting there are more of a pure play on a I have but also carry more idiosyncratic risk. An example would be a company that makes a chatbots that is used for clients come to you with questions on your website. But AI ETFs exist for all of those different types of companies.

Sometimes, more specific than others. It's not always clear. You have to look at the underlying portfolio to see what exists but oftentimes it's hard to predict who the winners from a big trend like this would be and it could be more important to make sure you don't miss the winners.

Perhaps settle for a base head rather than going for a homerun, in which case AI should impact much of the market, so holding a broad index ETF could be the way to go.

>> We have seen the rise of Nvidia last year because of the AIA boom Philip the S&P 500. You're talking about picks and shovels, the chipmakers, there was already a ETF that existed for the chipmakers tracking their moves. Anything specific come to mind?

>> There are a lot of different ways to go. There is a semi conductor specific ETF. There could be more to it. The companies that put together those big server farms that AI runs on, those Nvidia chips and GPU's run-on so there's a lot of different ways that you can do it. The problem is that everyone's VO, including asset managers, is different on what you should be exposed to for AI. If you're looking at all of the different AI ETFs, there is not any sort of consensus on which companies represent AI well so yeah, something like a semiconductor ETF tech stock could be the obvious path into AI.

But broadly, you never know. There could be NA I revolution that helps a lot of aging businesses really turn things around and so you would want to miss out on that either.

>> An interesting space to keep your eyes on. We will get back to your questions for Bryan Armour on ETFs in just a moment's time. As always, make sure you do your own research before making any investment decisions. and a reminder that you get in touch with us at any time.

Do you have a question about investing or what's driving the markets?

Our guests are eager to hear what's on your mind, so send us your questions.

There are two ways you can get in touch with us.

You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.

We'll see if one of our guests can get you the answer right here at MoneyTalk Live.

We got some new data about the health of Canadian households. This is the latest information revealing that the wealth gap in Canada has widened last year to levels that we have not seen in eight years. And equally has a new TD economics report.

>> As you mentioned, we know that the national household net worth, that their assets lesser liabilities, Ro $700 billion or about 4 1/2% year-over-year to just over $16 trillion in 2023. That's a rebound from a drop of 6.5% in 2022.

When it comes to disposable income, it was up 5.5% which was in line with previous year's growth rate.

But given that, the gains have not been shared equally across all incomes.

Specifically, household incomes in the highest quintile averaging about 197,000.

They saw gains of 6% up from the previous year. In contrast, families in the bottom and second quintiles saw their incomes rise by only .3% and decreased by .3% respectively. As this first chart shows,-- due to rising interest payments. That overshadowed the gains from investments on these properties.

When it comes to net worth, the picture is somewhat brighter. We saw all families were actually on average better off in 2023. It relative to pre-pandemic levels, and average household across income distribution saw gains in both income and wealth. However, when compared to inflation, not all these gains kept pace and as this next chart shows, notably disposable personal income for the second and third income quintiles were lower versus a cumulative increase in inflation CPI. That suggests that the real income is now lower on average. I think that's the key point that TD Economics wants to get across. Meanwhile, inflation on necessities force low and middle income households to rely more heavily on their savings to make ends meet.

With fewer liquid funds, this could have a direct implication on future spending by these families.

When it comes to middle income households, they also became more indebted than before the pandemic relative to 2019. They actually had the largest increase in their debt to income ratio and has households continue renewing their mortgages, the higher cost of debt servicing could cause some of these families to fall behind on debt payments.

The share of this cohort in the final consumption expenditures actually increase on average by 33% between 1999 to 2019.

That's up to 35% in 2023 when spending growth stood at roughly around $69 billion were nearly 13% above its own two decade trend.

This shows that this cohort has a big impact on the economy. TD Economics concludes that with the legging growth in real incomes and high debt burdens, this cohort of middle income families will create a drag on spending growth going forward.

>> That's key, right? The middle class, by definition, are the ones out there buying things. If they are feeling tapped out and stretched, what is going to keep the economy healthy?

>> Good question. TD Economics says that what will keep the economy turning for now is spending by consumers at the upper end of the income distribution. They account for more than half of aggregate spending and they still have some choices in pent-up demand in discretionary areas as well as the means to do other things.

>> MoneyTalk's Anthony Okolie.

Now, for an update on the market.

We are having a look at TD's Advanced Dashboard, platform designed for active traders available through TD Direct Investing. We are in the heat map function, giving us a view of the market movers. This is the TSX 60. Let's screen by price and volume.

We had an upside on the overall competent index. As we go into the 60, we can see what's going on. Shopify up in the quarter is the brightest bit of green. The stock is up to the tune of almost 5% right now.

As we go across the space, you are seeing some strength in the financials, more modest, but they are heavyweights in terms of adding to the top line number.

Also in the mining space, a bit of a mixed bag. Even though we saw a substantial pullback in the price of gold yesterday and gold prices are a little bit weaker again today, there was a real hit to some of the mining -related stocks yesterday on that pullback in the precious metal. Some stability in the space.

Barrick up a little more than 1%, Kinross up about three quarters of a percent.

The S&P 500 was on a losing streak that has finally managed to snap. On the S&P 100, our eyes are drawn to what's happening in the tech sector. Entity is up 3%, AMD is aptly percent as well.

We are getting Tesla's latest quarterly report after the closing bell today. It has been under pressure so far this year.

It's getting a bit today, up 3%.

GM of about 5% on a strong quarter and a strong forecast.

Let's get back to our questions about ETFs for Bryan Armour.

Someone says I am interested in a discussion on covered call ETFs, their pros and cons, particularly in this current market picture.

Let's talk about cover call ETFs. How do they work?

>> They start with an underlying stock exposure and then you sell a call option against it which effectively you almost catch it on some of the upside potential upside volatility for the stock or the underlying index, however it may be.

The trade-off is you cap the upside and then you turn into a cash flow rather than participating if the market really rises up and so people look at it relating to upper downside risk, if the stock or index drops, it would effectively cover some of those costs. But obviously the trade-off is the capped upside and the opportunity cost lost.

For younger investors, this may not be worth the lost opportunity cost and what I always go back to is the stock markets have big tails, if you look at the distributions of returns over a one-year period, there tend to be more extreme gains and losses than would be normal or we would expect from a normal distribution of returns. So you give up exposure to that good tale if the market really runs, but you keep exposure to the bad one, taking some yield off the table that offers a little buffer but there's a big drawdown you will still participate.

>> Interesting stuff there. We are out of time for questions. We started the show talking about actively managed ETFs. Give us a quick summary and things to keep in mind if someone is researching the space.

>> Yeah, I mean, the number one thing is that active ETFs are in their infancy so make sure you are doing your due diligence, look at which ETFs have had success. There is always strength in numbers.

You can look at ETFs, net assets to see where investors are putting their money.

There is not a ton of breadth and depth in terms of how many ETFs are doing really well in some of the more niche categories so making sure that you are identifying which ones of those are the most popular can be an easy way to find the best ones.

But there's obviously a wide array. The one thing to think about is if you are coming from mutual funds, is the trading cost, just make sure you are using limit orders, you are not trading at the open or the close and doing it during the core session. I know NYC just filed for his thinking about 24 seven trading.

Hopefully, that's not the case, because it doesn't really help anyone. But when markets are near the opening and closing auctions, spreads tend to get a little wider as price discovery is happening so just make sure you are buying and selling during the core session away from the open and close.

>> Interesting stuff to keep in mind.

Always great to have you on the show. Look forward to the next time.

>> Yeah, thanks, Greg.

>> Our thanks to Bryan Armour.

As always, make sure you do your own research before making any investment decisions.

we promised we would show you the QR code again. TD Direct Investing's Instagram account, that's what it's going to take you to you. You can find more information and more informative videos there about investing through using the QR code.

Stay tuned for tomorrow show. David Mau, VP, Dir. and portfolio manager with TD Asset Management will be our guest, taking your questions about industrial stocks. A reminder that you get a head start with those questions.

Just email MoneyTalkLive@TD.com.

Industrials is planes, trains, automobiles. Start your engines. Sorry for the cheesy joke there.

Had to throw one in. Anthony didn't even laugh. That's all the time we have for today. See you tomorrow.

[music]