1. Understanding Alternative ETFs … In 10 Minutes Or Less
Matt Hougan
CEO
Inside ETFs

2. ETFS 401 AGENDA
What Is The One Thing You Need to Know About Leveraged ETFs?
What Are The Two Things You Need to Know About Commodity ETFs?
What Are The Three Things You Need to Know About Alternative ETFs?
What Are The Four Things You Need To Know About Bitcoin ETFs?

3. The returns you get may not be the returns you expect…
What Is The One Thing You Need to Know About Leveraged ETFs?
The returns you get may not be the returns you expect…

4. What Is The One Thing You Need to Know About Leveraged ETFs?
Day 1: Index Level 100
-200% ETF Level 100
Day 2: Index up 10%
Index Level 110
-200% ETF Level 80
Day 3: Index down 10%
Index Level 99
-200% ETF Level 96
… because of math.

5. #1: The returns you get may not be the returns you expect…
What ARE THE TWO ThingS You Need to Know About Commodity ETFs?
#1: The returns you get may not be the returns you expect…

6. Commodity ETF Returns =
What ARE THE TWO ThingS You Need to Know About Commodity ETFs?
Commodity ETF Returns =
Spot Returns
+ Roll Yield
+ Collateral Yield
… because you’re not actually buying commodities.

7. #2: Different commodity ETFs are really different!
What ARE THE TWO ThingS You Need to Know About Commodity ETFs?
#2: Different commodity ETFs are really different!
Source: Stockcharts. Data as of 1/16/17.

8. What ARE THE Three ThingS You Need to Know About Alternative ETFs?
#1: Friends don’t let friends buy and hold VXX. (A % return since inception.)
Source: Stockcharts. Data as of 1/16/17.

9. #1b: I’m serious. (A -68.88% return since last year.)
What ARE THE Three ThingS You Need to Know About Alternative ETFs?
#1b: I’m serious. (A % return since last year.)
Source: Stockcharts. Data as of 1/16/17.

10. (The current implied annualized roll yield is -61%)
What ARE THE Three ThingS You Need to Know About Alternative ETFs?
#1c: Really serious.
(The current implied annualized roll yield is -61%)
Source: CBOE. Data as of 1/16/17.

11. TOP 10 ALTERNATIVE ETFS FOR FLOWS - 2017
What ARE THE Three ThingS You Need to Know About Alternative ETFs?
TOP 10 ALTERNATIVE ETFS FOR FLOWS
Name
Ticker
2017 Flows ($m)
AUM ($m)
iPath S&P 500 VIX Short-Term Futures ETN
VXX
1,022
921
IQ Merger Arbitrage ETF
MNA
213
364
ProShares VIX Short-Term Futures ETF
VIXY
170
135
JPMorgan Diversified Alternatives ETF
JPHF
106
162
WisdomTree Dynamic Long/Short U.S. Equity Fund
DYLS 61
101
JPMorgan Managed Futures Strategy ETF
JPMF 50
JPMorgan Event Driven ETF
JPED 25
Cambria Global Asset Allocation ETF
GAA 22 55
iPath S&P 500 VIX Mid-Term Futures ETN
VXZ 21 39
VelocityShares VIX Tail Risk ETN
BSWN 38
#1d: And yet, hope springs eternal.
Source: Factset. Data as of 12/31/17.

12. #2: What makes VXX tough to hold makes inverse VIX ETFs attractive…
What ARE THE Three ThingS You Need to Know About Alternative ETFs?
#2: What makes VXX tough to hold makes inverse VIX ETFs attractive…
Source: Stockcharts. Data as of 1/16/17.

13. …but they are not a gimme!
What ARE THE Three ThingS You Need to Know About Alternative ETFs?
…but they are not a gimme!
Source: Stockcharts.

14. #3: The new generation of hedge fund replication ETFs are awesome.
What ARE THE Three ThingS You Need to Know About Alternative ETFs?
#3: The new generation of hedge fund replication ETFs are awesome.

15. What Are the FOUR THINGS You Need to Know About bitcoin ETFs?
#1: They already exist*

16. #2: But GBTC isn’t one of them!
What Are the FOUR THINGS You Need to Know About bitcoin ETFs?
#2: But GBTC isn’t one of them!

17. #3: You actually don’t need one, anyway
What Are the FOUR THINGS You Need to Know About bitcoin ETFs?
#3: You actually don’t need one, anyway

18. #4: And bitcoin isn’t all there is to crypto-assets.
What Are the FOUR THINGS You Need to Know About bitcoin ETFs?
#4: And bitcoin isn’t all there is to crypto-assets.
Source: Bitwsie Asset Management. Data as of 1/16/17.

19. Understanding Alternative ETFs … In 10 Minutes Or Less
Matt Hougan
CEO
Inside ETFs