Market uncertainty has been the big story since the arrival of tariffs. But even entering 2025, ETF investors faced big challenges. But ETFs can provide all types of strategies to address portfolio needs. As such, understanding where ETFs have been and where they are going can really aid investors. Franklin Templeton’s Head of ETF Product & Capital Markets David Mann spoke with VettaFi at last month’s Exchange conference in Las Vegas on the topic.
Mann, who joined Franklin Templeton in 2016, regularly shares a newsletter about his thoughts on asset management and ETFs. He addressed a few key trends on the ETF landscape and discussed some new strategies from his company.
Active ETFs: Index vs. Non-Index
For example, and perhaps most significant, active ETFs and active investing dominated the discussion at Exchange. In Mann’s view from his predictions about 2025, many market watchers are coming around to a new view of active ETFs. Rather than either active or not, it may help to identify ETFs as “indexed” or “non-indexed.”
“The broader point — and this is nothing earth shattering — was “active” not meaning what I thought people think active means,” Mann said. “The bigger point is that if you actually look at the types of active strategies. There’s a lot of different flavors to them.”
He explained that non-index ETFs can invest in a wide variety of ways. Certain funds may have rules-based approaches, while others may aim to mostly adhere to benchmarks with some slight outperformance.
“So that was the broader point, which is I think what investors are starting to appreciate is [they]can get non-index strategies within the ETF vehicle. It just turns out we all call them active,” Mann added.
He also discussed Franklin Templeton’s crypto strategies. The company launched a new crypto ETF in February, EZPZ, that tracks the CF Institutional Digital Asset Index. The Franklin Crypto Index ETF (EZPZ) charges zero basis points, per ETF Database data. The fund focuses on bitcoin and ether, directly holding the currencies via its index. While right now the fund only invests in bitcoin and ether, future approvals of other cryptocurrencies could empower further crypto ETFs like EZPZ.
Dividend Funds
Perhaps more directly impactful this year for investors may be dividend and income ETFs. With volatility rising, income can help investors deal with day-to-day costs.
“From an ETF lens, we’ve identified that there are going to be slight nuances that investors might want to have to get that income,” Mann said.
The firm offers a variety of dividend and income-focused ETFs. Earlier this year, the issuer dropped two new dividend funds. The Franklin U.S. Dividend Multiplier Index ETF (XUDV) and the Franklin International Dividend Multiplier Index ETF (XIDV) joined the firm’s suite in January.
“What we want to do is want to [have]rules within the equity space that will ideally give some multiple of the benchmark,” Mann said. “We’re really excited about the growth prospects for those two funds.”
As uncertainty continues to grow, investors have all manner of ETF options. Whether the ever-shifting group of non-index ETFs or the evergreen case for dividend ETFs, investors have plenty to consider in ETF trends this year.
For more news, information, and strategy, visit ETF Trends.
VettaFi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for XUDV and XIDV, for which it receives an index licensing fee. However, XUDV and XIDV are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of XUDV and XIDV.
