Blogs

On January 10, 2024, the Securities and Exchange Commission (“SEC”) granted approval to spot bitcoin exchange-traded products, a little over 10 years after the first application with the SEC to create a spot bitcoin product. Within the first three days of trading, bitcoin exchange-traded funds (ETFs) pulled in just under $900 million from investors. While it may be tempting to jump on the bandwagon to invest in a spot bitcoin ETF, there are several matters that investment advisers of registered mutual funds (or exchange-traded funds) should consider before adding this asset class to a fund’s investment strategy.

While the ETF asset pool continues to grow (topping $8.1 trillion in the U.S. as of December 2023), advisers are also seeing increases in assets raised via Separately Managed Accounts (SMAs). According to Cerulli Associates, there is about $2 trillion in SMA account assets, up 14.1% from $1.72 trillion in assets in 2022, and assets in these accounts are projected to reach $2.9 trillion by 2026.2 Investors are clearly becoming more and more aware of the advantages to these types of accounts. They receive customized strategies, often get a high level of personal attention from their money managers and have the ability to see all of their specific holdings in one statement.

The 2023 ExchangeETF Conference was an important gathering for the ETF industry and ETF-centric advisers in what may be a pivotal year that could usher in more growth and innovation. With over 3,000 ETFs in this now crowded market, and 2023 set for a possible record year for launches, sorting through the ETF universe and taking advantage of key trends and enhanced business innovation is critical to success. In addition to our active participation in the conference, we wanted to write a review and share our thoughts on this year’s event to give our partners and clients a deeper sense of the trends within the ETF marketplace.

Over the past 10 years the number of Exchange Traded Funds (ETFs) has more than doubled and in that same time period1, assets in exchange traded funds have increased by nearly seven times2. Statistically speaking it appears that now is the optimal time to introduce exchange traded funds – and to be sure there are a number of advantages.

Exchange: An ETF Experience, a large-scale investment industry conference focused on ETFs, took place in Miami Beach, FL, April 11-14, 2022. This new experience, set to be an annual event, attracted over 2,0001 attendees including financial advisers, product sponsors, service providers, and thought leaders in the ETF space

Interest in actively managed ETFs (exchange-traded funds) continues to grow as investors and financial advisers gravitate towards these structures as an investment of choice.