ETF Edge: ETF Themes To Watch In 2021 | ETF Trends

Starting this new year on “ETF Edge,” ETF Trends CIO and Director of Research, Dave Nadig, joins host Bob Pisani, and Harry Whitton, Head of ETF Sales Trading for Old Mission, to go over ESG inflows in thematic ETFs in 2020, and how that will affect things going forward in 2021.

Nadig starts by explaining how 2020 was a record year, with over $500 billion in new money flowing into the ETF industry and over 300 new funds for investors to trade in — general thematic or actively managed funds, if not something ESG-related. That said, there are steps to take next.

He continues, “I do think folks are a little more concerned about risk management. But, thematic ETFs are, for sure, here to stay. We’ve all seen this K-shaped recovery, and how it’s really nominated winners and losers in the market, and investors and advisories are out there trying to really find those winners.”

Accounting For Conversion

Turning to Whitton, who is asked about the trends for active non-transparent ETFs and the conversion of mutual funds into ETFs, he states how things went from zero to 20 non-transparent funds by the end of 2020, and 2021 is only going to see a greater increase.

As far as conversion, Whitton notes how multiple firms, including Dimensional, are going through this process on a number of mutual funds. Dimensional, in particular, is going to change 6 funds with over $20 billion in assets.

“This has a lot of potential in the marketplace to see many assets being moved quickly,” Whitton explains.

He continues, “They were telling people actively, they should move their mutual fund share class to the ETF share class. They have a little bit different structure than a traditional ETF, and that’s what they’re doing.”

When considering how significant this conversion process could be as far as the effect on ETF inflows, Whitton sees there is a chance of this being huge. Not in retirement plans, but other assets will have a lot of wealth to share around.

Watch Dave Nadig And Harry Whitton Discuss ETF Themes For 2021:

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