A Collective ETF Trading Mentality

What do sports cards have in common with exchange-traded funds? David Mann, Head of Global Exchange Traded Funds (ETFs) Capital Markets, explains why a collective mentality may be beneficial for traders of both.

Thanks to my son, the latest craze to hit my household is the collecting and trading of sports cards. He scours the internet as well as local card shows to find what he thinks are undervalued cards. I have been reluctantly supportive of this hobby as I do think there are some solid life skills around the art of negotiating and ideally making a profit (side note: he says he is bringing in tons of money, but I am dubious!)

There seem to be two key factors that drive the value of these cards and interestingly, the actual player on the card is not necessarily one of them. The first factor: rookie card. That seems to be the only card game in town. The second factor is the condition of the card. Not surprisingly, a mint condition card will be worth more than one with frayed edges.

There are grading companies that my son and his friends send their best cards to, in order to see if they will be rated a nine or a 10, as their rating would materially impact the value of that card. Upon researching the cost of rating a card, my son was initially puzzled by the fact that the cost per card drops significantly when you send in more cards—call it a bulk discount. He then rightfully understood that if he and his friends sent their cards together, the individual cost per card to them would be lower. “Pretty smart for us to work together, right dad?”