BTV Market Insights - Michael Kovacs
Market questions answered by the CEO of Harvest Portfolios Group, Michael Kovacs
Michael Kovacs shares his thoughts on recent market trends concerning the ETF space and beyond.
Share the major difference between an ETF and mutual fund.
ETF's are mutual fund trusts. Except the main difference is an ETF trades on the market and you've got valuations based on that underlying portfolio of securities, whereas the mutual fund, you basically get the end of the day's price and that's your daily NAV, whether you bought the fund at nine in the morning or three in the afternoon.
What are some key differences with Harvest’s investment approach?
Harvest is very unique in the way that they approach the marketplace. Harvest sticks with equities over the longer term. They're all about equity because they believe at the end of the day, capital is grown or wealth is created through the ownership of great companies: companies that are well-managed, companies that pay dividends every quarter, that are expanding their markets, and their client bases.
What are some sector investment trends you’re seeing right now in ETFs?
They're seeing a lot of individuals looking towards income type investments, and Michael believes it has to do with the large demographic that's retiring. The baby boomers that are now in retirement or looking to retire. They're now looking for ways that they can stretch out those assets and get great income. The other area that Harvest is seeing a very strong trend in is ESG: which is environmental, social, and governance. Basically, people are looking for portfolios that are much more socially responsible, that have environmental focuses.
Will we see blockchain/crypto resurge; and why?
To predict where cryptocurrencies are going longer term is a little tough. The most widely used that we know of are Ethereum and Bitcoin. Michael thinks those have great long term futures ahead of them, but there's a number of them that he doesn't know how they're going to do over time, but the underlying blockchain technology is here to stay. From Michael's 35 year perspective in the market, you're always going to get disruption sooner or later for different reasons every time. But if you're sort of a long term thinker and you're sort of looking out five, ten years or longer, you should just stick to your knitting.