John Davi, founder and CEO of Astoria Management, said a specific ETF investing strategy is "the definition of insanity" during a CNBC interview.
The debate highlights a growing divide in the financial sector over whether exchange-traded funds should be used for long-term stability or aggressive trading.
Speaking on the "ETF Edge" program with host Dominic Chu, Davi said the best ways to approach ETF trading for the long haul [1]. The conversation focused on the risks associated with certain investment patterns that Davi believes lead to poor outcomes for investors [1].
While Davi questioned specific strategies, other firms are aggressively expanding their offerings. Nico Laqua, the CEO of Corgi, said his firm plans to launch 1,000 ETFs in 2026 [2]. This rapid expansion comes as the market sees a surge in the variety of available funds, ranging from niche sector bets to broad index trackers.
Davi and Laqua represented opposing views on the current state of the ETF market. The discussion touched upon the balance between providing investors with a wide array of choices and ensuring those choices are grounded in sustainable financial logic [1].
As the number of available ETFs grows, the responsibility for due diligence shifts more heavily toward the individual investor. The proliferation of new funds may complicate the process of identifying high-quality assets in an increasingly crowded marketplace [2].
“"the definition of insanity"”
The tension between Astoria's cautious approach and Corgi's massive expansion reflects a broader trend of 'ETF-ization' in finance. While launching a high volume of funds increases market liquidity and accessibility, it also risks creating a fragmented landscape where many funds may lack sufficient assets or clear long-term viability, potentially leading to higher volatility for retail investors.
