What ETF Investors want in a search tool

Just because you’ve been using a big company’s ETF search tool doesn’t mean it has all the answers, products, and solutions.

Just because you’ve been using a big company’s ETF search tool doesn’t mean it has all the answers, products, and solutions.

While other search tools may have worked for you up until now, we know such tools have left you wanting more … and that current solutions may not be lasting ones.

Sooner than later, an upstart creates a groundbreaking experience that works better and is unlike anything you’ve seen before. Slowly, a tribe speaks and propels the best product to the mainstream.

It becomes the tool people didn’t know they needed.

At Threadvest, we set out to make the best ETF search tool.

After years of working in the industry, we believe we cracked the nut about how people search for ETFs to invest in. We know it works, and here’s why.

ETFs are great investments, but finding the right one can be a pain

In general, ETFs make getting investing in this space easy, and are attractive to investors because they don’t have to know someone or have a ton of money. There are also typically no gates nor minimum investment amounts.

Other attractive benefits to investing in ETFs are their transparency, daily liquidity, and intra-day public market price discovery.

But beyond the basics, there is a vast amount of ETFs on the market, more than 2,200 in fact, and trying to find the best ones for you looks like finding needles in a haystack.

… Until now. Let’s test out the ETF Miner together

We decided to test drive the fast and free ETF Miner’s robust technology to investigate how easily it provides access to the private credit market.

This is a rather new space that has developed within the community of ETFs, but is typically a hard one to find for novice, casual, and seasoned investors alike.

Searching this space requires refining what you ask about in your search. Is it “private credit,” “private debt”?

Other search tools ask you to start here:

  • Equity or fixed income exposure?
  • Investment grade or non-investment grade?
  • U.S. or international exposure?
  • U.S. dollar or local currency?

The list goes on and on.

Now, let’s use the ETF Miner and tackle the first question: Private credit or private debt?

The ETF Miner processes your queries just as you would ask them, because we know things aren’t always so black and white.

It uses natural language processing (NLP), not check boxes.

Other search tools may leave you giving up in frustration before you even get past their interrogation-style search questions.

To prove this, we logged into the ETF Miner and entered the keywords “private credit” and “private equity,” and received the following results:

The three results provided were VPC, PSP, and AFIF, which keyed on the existence of private sector securities and related indices in equity and fixed income, and across various company names.

The Miner results also showed that they have very different fee levels and provided a look-see into how each fund performed relative to the wide ranging fees they charge, from low to very high.

All of this interesting data was presented to us in just a few minutes.

Within the world of private credit and debt, each selection is unique to each other and provides robust alternatives within the specific search’s desired space.

Two are fixed income based, one is equity based.

AFIF and PSP are principally international, VPC is domestic.

PSP has been around for 14 years, the other two are recent creations having started less than two years ago.

As expected, two had wide swings in performance and one (AFIF) was steady.

PSP provides equity related access to American and global depository receipts, which include securities from 40 to 75 private equity companies.

AFIF on the other hand goes down the desired field a bit more than RAVI, with more exposure within the non-investment grade and non-public space.

VPC remained the unique, and possibly most pure, fund in the space, with its advantages and access that justify the purist’s desire to engage at that fee level (which included performance fees).

The Miner makes it easy for a curious investor to quickly compare the fund’s performance versus its fees.

The 3 choices the ETF Miner provided are excellent options for you to quickly see a varied field and then lets you decide for yourself or see other results in a matter of clicks.

Remember, the Miner lets you state your priorities, and then provides 3 results after 3 simple clicks.

Your priorities are also saved, which means you can keep searching and finding results in seconds, (not minutes) and in as few mouse clicks as possible.

We’re confident there isn’t a scanner on the market that allows you to see results across the spectrum as quickly as the ETF Miner.

How other ETF search tools compare (Hint: We know they just can’t!)

Beyond the private equity/credit/debt space, in looking at the ETF Miner and search more broadly, consider the following process required in most scanner search tools:

ETF investors want to search by themes, not regions

We believe that investors first desire themes, not whether an ETF is U.S. or international. Many “U.S.” investments, such as the Bellwether S&P 500, contain about 40-45% international exposure.

So, choosing a “Region” could be misleading.

Consider the following search result from a popular fund issuer’s search tool:

Same for “Market” where “Global” and “Non-U.S.” choices are repeated. “Emerging” and “Developed” are similarly vexing, as S&P 500 also does business in both of those international subsets. If “U.S.” is chosen, you get S&P companies, which have international exposure.

This could simply be misleading to the investor.

In short, an ETF search simply shouldn't begin by forcing you to pick a regional attribute. This implies that you already know what you want, which in most cases you don’t.

On “Style”, most people would choose “Blend” as the difference between the two is not clear.

We say choose a theme, stock or ETF and go. Tell us your priorities and the ETF Miner immediately starts giving you possibilities.

On “Size,” it’s not clear whether an investor should care more about the size of the ETF itself or the size of the companies in the ETF. If a small, new ETF failed, what does that do to the investment?

The ETF Miner’s focus in the selection process is on the size of the ETF. The Miner’s results make it clear which companies are owned by the ETF, whether they are large or small. If you choose the S&P 500, the Dow or any of the dozen derivations of each, you know that the companies are large.

Regarding “Management Style,” most ETF investors know that most are tied to an index or created with an index in mind. When choosing a theme, the ETF Miner may posit choices that include more “actively managed” ETFs.

Consider another example: If a U.S. user searched “Mortgage Market,” he or she may solely have the U.S.-based market in mind. However, the ETF Miner may produce a result that includes mortgages made in Austria, a generally safe and creditworthy country. This is because at Threadvest, we believe part of the investment search process should include options that fit the theme for broader consideration.

On the other hand, if the user sought the “U.S. Mortgage Market,” then the Miner’s natural language processing (NLP) features would have eliminated Austria.

But notably, if someone sought “Asia-excluding Japan,”  or “Asia ex-Japan,” another internet or scanner search might produce an ETF with Japan in it, keying only on the word “Japan.”

The ETF Miner, however, would catch that distinction.

We’re not saying the other search engines are bad, but we don’t know any from the dozens we’ve evaluated that could decipher keywords that effectively. The ETF Miner’s NLP ability is what makes all the difference.