Finally, ETFs just for FIRE people!

[FireLane]

I saw a social media ad touting this website:

https://fire-etfs.com/

They talk a big game about how they're offering two ETFs that are "designed specifically to help support the FIRE community":

https://fire-etfs.com/firs/
"FIRS is an investment product designed to support your journey toward Financial Independence and Retire Early (FIRE). With a focus on resilience and potential growth across various market cycles, FIRS seeks long-term capital appreciation and diversification across four strategically constructed ETF baskets that align with Prosperity, Recession, Inflation, and Deflation conditions. This approach seeks to position your investments to respond effectively to changing economic environments."

https://fire-etfs.com/firi/
"FIRI is an actively-managed fund designed to seek current income, with an aim to provide a 4% target annual income level. Tailored to align with the Financial Independence and Retire Early (FIRE) lifestyle, FIRI offers a potential income stream to support financial goals."

You want to know the expense ratios, right? Of course you do.

FIRS has a 0.67% expense ratio. FIRI is 0.89%!

In a token attempt to appeal to the FIRE community, they have a section on their website with articles about debt, budgeting and minimalism. Not surprisingly, they don't have any articles about why index funds are a wise idea, or how actively managed funds with high expense ratios drain your wealth while usually producing subpar returns.

I can't tell whether to be flattered, amused or insulted. I'm guessing they're targeting people who've vaguely heard of FIRE and think it sounds like a cool idea, but don't actually know anything about it.

[JAYSLOL]

Seems like most other “lifestyle” products. Overpriced product sold to people who aspire to the dream, but don’t do the actual work. Like high end athletic shoes to people who don’t run, or hike or even walk lol, or sports drinks to people who only aspire to do exercise and drink it while they drive their Dodge Ram around to pick up groceries.

[jinga nation]

"FIRI is an actively-managed fund designed to seek current income, with an aim to provide a 4% target annual income level. Tailored to align with the Financial Independence and Retire Early (FIRE) lifestyle, FIRI offers a potential income stream to support financial goals."

Backtesting isn't viable due to these being new funds (I tried): https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=60LTTZtaXeTl29z4udsVjl

I'll stick with passive VTI at 0.03% than these new-fangled funds du jour.
Let someone else be the sucka, ain't fallin' for this.

[aasdfadsf]

I guess I don't even get what the theory is supposed to be behind this. There is no special investment philosophy behind FIRE, the whole idea is stick to the boring tried and true strategy of accepting average market returns, but you save aggressively and do it faster.

If you could come up with a fund with a better return, then sure, but then the whole world would be beating a path to your door.

[LennStar]

I guess I don't even get what the theory is supposed to be behind this. There is no special investment philosophy behind FIRE, the whole idea is stick to the boring tried and true strategy of accepting average market returns, but you save aggressively and do it faster.

If you could come up with a fund with a better return, then sure, but then the whole world would be beating a path to your door.

I always thought that a half-passive ETF would work better.
You know, take the MSCI world for example and make some statistical changes. Take out the worst 10-20% of companies in the last 3 months and put it into the best performing 10%.
That would auto-adjust to cycles and also kick out the companies dying.

(Or just take the best 70% in the last 10 years or whatever easy to measure stat.)

But that would be active management (haha, a computer can do that in seconds) and cost a whole % more.

[NorthernIkigai]

But that would be active management (haha, a computer can do that in seconds) and cost a whole % more.

You'd think that a computer could do that in seconds. But actually, as with almost everything, it's harder to do than it looks.

Even index funds and other passive funds require some management (the index changes at least every day, but it's pointless and not cost-efficient for the fund to trade every day), there's always some cash that has to be managed (otherwise the fund would *have* to sell shares any day that there are net redemptions), a lot of reporting that has to be done both to customers and increasingly to various authorities, tax issues to consider (especially for funds owning stocks in many countries), currency issues to consider (ditto), customers to serve (unless that part is outsourced), etc.

With an actively managed fund, it's all of the above, plus more. Plus that people buying an active fund usually expect some more action than those investing in passive ones, so fund managers tend to buy and sell just to look active (thereby incurring trading costs for the fund, but never mind).

Fund management still requires quite some human decision making and trading done by humans, at least for now.