The past few years have marked a significant shift in the investment landscape, particularly in financial hubs like Houston. The days when stock portfolios and asset management were the exclusive domains of a privileged few seem to be dwindling, replaced by a shift toward inclusivity and financial democratization. At the forefront of this transformation is a financial instrument that is rapidly gaining popularity – Exchange-Traded Funds (ETFs).
Their rising popularity is not coincidental. Historically, investing in a diverse portfolio of stocks, bonds, or commodities requires substantial resources and expertise. However, ETFs—which, as their name says, are traded on exchanges just like individual stocks— offer a level of accessibility previously unheard of in asset management.
According to one of Houston’s most prominent financial advisors, Christopher J. Day, the founder of Days Global Advisors, ETFs provide various benefits that cater to the demands of a versatile pool of investors. These include diversification, which helps mitigate risk, real-time market pricing, and, more importantly, typically lower costs than conventional mutual funds.
However, Day believes there are two more factors that must not be ignored: ETFs’ liquidity and transparency.
“In the past, a mutual fund’s price was determined at the close of a day, and you didn’t really know what was happening. With ETFs, you have both transparency and liquidity. If you decide you no longer want to own energy, for example, you can drop the whole sector if it’s a sector ETF,” he explains. “You don’t have this flexibility with mutual funds as they aren’t divided up similarly.”
Certainly, owing to these two remarkable factors, ETFs can give investors unprecedented control to tailor their investment portfolios according to their needs – and current financial capabilities.
This closely ties in with another aspect of Day’s philosophy and ETF advocacy, particularly with Days Global Advisors. As he points out, traditional asset and wealth management strategies were, essentially, kept within the confines of the privileged few.
But ETF’s transparent and accessible nature has made them a true ace up one’s sleeve among the countless investors who were marginalized by traditional finance. As someone who has built his wealth preservation strategies on the principles of Diversity, Equity, and Inclusivity (DEI), Day believes that the playing field has to be leveled and that the financial landscape has to be made more accessible for all.
As a step forward with this mission, Day has utilized platforms like social media to demystify the complexities of finance and make investment strategies more accessible and understandable. His efforts on platforms such as TikTok have allowed him to reach a broader audience, emphasizing the importance of financial literacy and empowering individuals from all walks of life to participate actively in their financial future.
Another gigantic leap that Day has made with Days Global Advisors, serving his mission of the financial and investment landscapes far more inclusive, is his absolute-return ETF, trading under the ticker HF (NYSE: HF). Infused with a macro hedge strategy, Day’s ETF seamlessly mends the gap between conventional hedge funds and the general public.
“The ETF was designed with the idea of democratizing access to alternative options and allowing people, even those who are brand-new to finance, to expand their investment horizons,” he says. “Everyone should have a chance to realize their dreams of financial independence, regardless of their socioeconomic background, and that’s precisely the goal with our ETF.”
Since its launch, Days Global Advisors’ ETF has exhibited a promising start, as seen not just in its ability to outperform traditional portfolios but also in its flexibility in terms of weathering the market’s inherent volatility.
Interestingly, teaching about ETFs and their merits is a vital aspect of Day’s social media efforts. Through compelling storytelling and real-world examples, Day provides invaluable lessons on how to incorporate his own or even other ETFs into one’s portfolio.
That said, Day’s approach is not just about providing tools like ETFs; it’s about fostering an environment where every individual, regardless of their financial background or expertise, feels confident and equipped to navigate the world of finance. By breaking down complex investment terms and strategies into easy-to-digest content, he has been able to bring financial empowerment to those who were traditionally left on the outside looking in.
Looking ahead, Day anticipates a time when ETFs are a dominant force. He also shares ETFs may offer greater tax efficiency. He explains that, unlike mutual funds, which require individuals to pay taxes on the dividends and capital gains distributed throughout their investment, ETFs allow investors to avoid capital gains taxes until the asset is sold.
“This is mostly because of how ETFs are made and used. When new ETF shares are created or when they’re taken out of circulation, it’s not done with cash like you might buy something at a store,” he says. “Instead, you can think of it as exchanging a gold bar for an equivalent value of diamonds.”
Lastly, the ease with which ETFs can be bought and sold is another factor in their favor, considering the fact investors can view real-time pricing and buy or sell them at any time during the trading day.
Essentially, looking at the bigger picture, Day views ETFs as the future of investing. By offering broad market access, transparency, and cost-effectiveness, they are democratizing the investment landscape and making asset management accessible to a wider audience.
He says, “With ETFs, we’re moving towards a more inclusive financial reality. Their trajectory might be unpredictable, but the end goal is promising.”