You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. More Ways to Extract Fees! Hooray, Wall Street!Remember 1993? Well, this was never Jack Bogle's vision...
Dear Fellow Traveler: Dave Nadig just dropped some numbers on Barry Ritholtz’s podcast that should make every investor’s head spin. We launched 600 new ETFs in just the first eight months of 2025. Nadig predicts we’ll hit 800-900 by year’s end. And next year? “Several thousand more,” says the ETF expert. Look at this chart from Bloomberg.
The yellow line shows ETF growth absolutely exploding since 2010 - from about 1,000 funds to over 4,000 today. Meanwhile, the number of actual companies (black line) has been flat or even declining. More recipes than ingredients. More ways to gamble than things to actually invest in. The Fee Extraction BonanzaHere’s the kicker from Nadig’s interview: “About 25% of the implied revenue from flow is going to products that cost over 1%.” The industry discovered people will pay hedge fund fees for casino products wrapped in an ETF structure. It’s unreal… We’ve gone from Jack Bogle’s 0.03% index funds to a carnival of expensive derivatives. Nadig admits that most new launches are “very expensive” and “very speculative,” involving leveraged bets, options strategies, and what he calls “selling volatility.” The real madness is coming from single-stock ETFs. Not just buying Apple - but 2x Apple, inverse Apple, covered-call Apple, capped-upside Apple. As Nadig explained: “We’ve got 500 stocks in the S&P 500. There are about six different flavors you can think of for each individual stock. That’s a couple thousand ETFs.” Six flavors of every stock… times 500 companies. “Legitimately, I think by this time next year, we could have several thousand more ETFs than we do right now,” Nadig said. Then there’s “share class relief…” New regulatory changes will let every mutual fund instantly become an ETF. Nadig estimates this could add “five or 6,000 new ETFs” if everyone converts. The industry has 70 applications pending. When approved, it becomes “very, very simple boilerplate paperwork” to launch new funds. Good for them. Can we make it as easy with job hiring, banking loans, and home ownership, please? You know… stuff that really matters? What Bogle Built vs. What We GotAs I wrote in my 1993 series, the original SPY was supposed to democratize investing. It would give regular people broad market exposure at institutional costs. Just consider what we have built in just the last few years… YALL - The God Bless America ETF An actively managed fund that excludes “politically left activism.” Is it top holding? Tesla at 8%. Why not? Nothing says traditional American values like a South African electric car company. It charges 0.65% to avoid woke stocks. CATH - Catholic Values ETF This screens the S&P 500 for Catholic moral guidelines. 448 holdings. And everyone single one of the stocks - carrying virtually the same weight as the S&P 500’s weight for each name - is apparently Catholic. But the fact is… Home Depot is extra Catholic because Jesus was a carpenter… ELON - TSLA vs Ford ETF This is an ETF that is just long Tesla and short Ford. Charges 1.3% for a two-stock bet you could make yourself for free. It’s named ELON. Because of course… WILD - Animal Spirits 2X Strategy ETF This is a leveraged ETF that picks five random securities daily. It’s called WILD because apparently “YOLO” was taken. This is what happens when day traders become fund managers. PAWZ - Pet Care ETF This is supposedly focused on pet care, but it actually owns Nestle and Colgate because they make dog food. It’s like calling McDonald’s a real estate ETF because they own buildings. Let’s Call it a DayBogle’s vision is now drowning in a sea of YALL (God Bless America ETF), ELON (Tesla vs Ford), and WILD (random stock picker). We’ve weaponized patriotism, celebrity worship, and gambling addiction into 1%+ fee products. To his credit, Ritholtz ended the interview with actual wisdom: “Directional bets leverage two x three x inverse bets. Those are really special use cases. Tread carefully if you’re playing in those spaces. Use ETFs for what they’re really good at: Getting you low-cost exposure to inexpensive indices. Tread lightly when you go into the pricier, wilder stuff; those are potential accidents waiting to happen.” But the damage is done. We have more funds than stocks, more complexity than clarity, and more fees than ever. I forgot to add… Nadig offered this important gem: “I think the ETF structure is the most efficient vehicle we’ve come up with for taking exposures and getting them traded on exchanges.” Don’t forget the efficiency of extracting fees… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. 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