In the last nearly 800 days, the growing number of advisors that incorporate ETFs into their practice have only been able to digitally learn what makes one product different from another. But next week, that will end, as many descend to Florida for Exchange, An ETF Experience. This four-day conference co-run by ETF Trends & ETF Database and Advisor Circle will likely have over 2,000 attendees, with more than half of them advisors. In addition to educational sessions on a range of ETF topics, there will also be opportunities to network and connect with peers.
ETF Trends will cover the conference with team members on the ground in addition to being on stage. Wave hi to Tom Lydon, Lara Crigger, Dave Nadig and me if you are going in person. Let’s look back at some of the key milestones for the ETF industry in the past two-plus years that we had to have Zoom discussions about.
- April 2020 – American Century launched the first semi-transparent ETFs. With the initial trading of American Century Focused Dynamic Growth ETF (FDG) and American Century Focused Large Cap Value ETF (FLV), asset managers could bring actively managed products with the liquidity and tax efficiency benefits to market of an ETF while protecting their intellectual property. The new ETFs disclose holdings as frequently as they do with mutual funds. American Century has met advisors where they are, and combined, these two American Century ETFs have $400 million in assets. Fidelity, Invesco, and T. Rowe Price are among the others that have also launched semi-transparent products.
- May 2020 – Federal Reserve bought corporate bond ETFs. To counteract the effects of Covid-19 induced lockdowns on the credit market, the Federal Reserve began buying iShares $ iBoxx Investment Grade Corporate Bond ETF (LQD), Vanguard Intermediate Corporate Bond Index ETF (VCIT), SPDR Bloomberg High Yield Bond ETF (JNK) and many others. The Fed’s actions provided liquidity to the bond market, contributing to broader investor adoption of bond ETFs. Bond ETFs brought in a then-record $200 billion-plus of net inflows in 2020.
- March 2021 – Guinness Atkinson was the first asset manager to convert mutual funds into ETFs, currently named SmartETFs Dividend Builder (DIVS) and SmartETFs Asia Pacific Dividend Builder (ADIV). The shareholders owned an ETF without having to sell their mutual fund and incur tax implications. Since then, Dimensional Funds has converted several mutual funds to help the asset manager achieve scale in the ETF market.
- October 2021 – ProShares launched the first bitcoin-related ETF. ProShares Bitcoin Strategy ETF (BITO) began trading with $1 billion in assets within days and nearly a decade after the initial efforts by asset managers to bring access to the cryptocurrency through an ETF. BITO invests in bitcoin futures as the SEC continues to withhold approval from ETFs’ own spot bitcoin directly.
- February 2022 – BondBloxx offered the first high-yield bond sector ETFs. For years, advisors wanting exposure to speculative-grade credit had to take a broad market approach using ETFs like JNK and accept it came with exposure to energy, health care, and information technology sectors, among others. With BondBloxx USD High Yield Bond Energy Sector ETF (XHYE), advisors have more flexibility to target the exposure they provide to end clients.
Hundreds of other new ETFs have come to market, many quickly gathering significant assets. Advisors will get a chance to learn more about these offerings at Exchange as asset managers stand ready to provide educational assistance. If you are going to Exchange, make sure to catch the ETF Trends team and fellow nerds Monday at 5:30 pm, where we will be reviewing What Advisors Are Thinking & How They’re Allocating in Today’s Market.
For more news, information, and strategy, visit ETF Trends.