ETF Industry Growth Is Only Just Beginning

The U.S. exchange traded fund universe has almost 2,000 different options available with about $2.8 trillion in assets under management, but the industry continues to expand its offerings and grow assets.

ETF Trends publisher Tom Lydon spoke with Dave Nadig, CEO of ETF.com, at the Inside ETFs conference that ran Jan. 22-25, 2017 to talk about developments in the ETFs that could continue to propel the industry.

“The active passive debate just seems to never get old, right,” Nadig said. “I mean everybody’s talking about smart beta. They’re talking about new entrants from the active space. We’ve got folks like Davis here, you know. launching brand-new funds – traditional stock-picking active showing up in spades. I think that’s a big topic of conversation; I think we’re going to see a lot more of it this year.”

Active strategies in the ETF space have been pushed to the side as trillions of dollars followed into passive, index-based ETFs instead. However, as we head toward an extended bull market, active pickers may have their moment to shine and begin attracting more investment interest.

“I think we’re gong to crack it open,” Nadig said. “I think we’re going to see a lot more equity, too.”

Given the broad reach of the ETF industry, fund providers seeking to add new strategies to market are increasingly becoming thematic in their approach as a way to separate themselves from the competition.

“I think some of them will stick,” Nadig said. “Some of these may stick, some of them may not. I think they’re really useful tools for investors – really for speculators who want to maybe play a crazy Trump tweet. I think there’s value in having these in the market.”

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