With less than three weeks left in 2023, it is the time of year to ponder and reflect on all that has enamored the financial markets and the ETF world this year. This is why in a recent special edition video, VettaFi’s financial futurist, Dave Nadig, and VettaFi’s Head of Research, Todd Rosenbluth, sat down with one another to discuss some of the highlights from the year and also shared what advisors can expect from the Exchange Conference in 2024.
Wrapping Up 2023 and What’s Next at Exchange
Dave Nadig: Todd, what’s the biggest story of 2023?
Todd Rosenbluth: Well for ETFs, it’s just continuing to see money going in. I think actively managed ETFs, the whole host of new providers that have entered the market or expanded their presence. We’ve continued to see firms like BlackRock, PIMCO, T. Rowe Price, and Capital Group. And I can go on and on. They keep adding to their lineup of already successful products.
We’ve got Dimensional funds that already crossed $100 billion. JP Morgan is not far behind. Fidelity converted a whole host of funds into $50 billion. We can probably spend 10 minutes of me just naming the actively managed ETF firms.
Dave Nadig: Do you think it keeps rolling this way? Because once we locate, so Fidelity rolls out Mellon and Fidelity rolls out FBON and PIMCO rolls out their best ideas fund. I feel like we’re getting the last gasp of these really great active products that have been in the mutual fund business for a while. Once those are all in, like we’re up to what, 3,800 ETFs or something like that.
Do you feel like active is really going to have that kind of runway? Because all that active is coming to market pretty darn cheap. The ETF effect is real on those funds.
Todd Rosenbluth: Right, so there’s a difference. Are we going to see more supply? Yes, we’re going to see more supply. The demand that we’ve seen this year, which is I think is close to 25% of the flows that we’ve seen, has gone into actively managed ETFs. That’s another year that has been punching above its weight. I don’t know that we’re going to see that year after year after year unless we count conversions happening or unless we get new share classes of ETF and mutual funds.
But active ETFs are here. They’re here to stay. And we’ve got these great firms that people know of in the mutual fund world. Now they’re here in the ETF space and many of them are going to be at Exchange, and I’m excited for that too.
Dave Nadig: What do you think the story for Exchange is going to be? When we’re looking at 2024, and thinking about the rest of the ETF industry what, other than a spot Bitcoin ETF, what will be the story of the year in 2024?
Todd Rosenbluth: Well, I think the topic at Exchange is going to be the election. We’re obviously going to be heating up on that. We’ve got experts that are coming down. And people are going to be positioning ahead of what they think that’s going to be. I don’t know that I know what the story of the year for ETFs is going to be in 2024. I’m still trying to wrap up 2023, man.
Dave Nadig: Well, good seeing you Todd.