- (0:45) - ETF Trends In The Industry
- (6:40) – Index Tracking the Market: Toroso ETF Industry Index
- (12:15) - Weighting For the Index: Who Is On Top?
- (18:10) - How Important Are ETFs to Index Providers Like MSCI?
- (21:30) – How Does the ETF Industry Fit in Your Portfolio?
- (22:40) - Episode Roundup: Podcast@Zacks.com
As you might guess from the fact that I host a podcast on ETFs, I am pretty bullish on the future of the Exchange-Traded Fund industry. This is especially true when you compare its growth prospects to the rest of the investing and finance world, as ETF asset growth and fund creation has been quite impressive, and looks to continue down that path in the near term too.
But how can you invest in this growth?
After all, many companies in the ETF world—such as Vanguard, the #2 asset manager—are not publicly traded. And others that dominate the space, such as Blackrock’s (BLK - Free Report) iShares or State Street’s (STT - Free Report) SPDRs, are not the entire business for their massive parents. So, what’s an investor to do?
Well, if you are looking to invest in the world of ETFs, Mike Venuto, the CIO of Toroso Investments, has some insights. Mike is behind the Toroso ETF Industry Index, the benchmark behind the first fund to offer direct and focused exposure to the ETF industry, the ETF Industry Exposure & Financial Services ETF (TETF - Free Report) .
We discuss this benchmark, and investing in the ETF industry in general, in this week’s edition of the Dutram Report.
Industry in Focus
In the podcast, Mike and I address talk of an ‘ETF bubble’ and why we have seen such incredible growth in ETFs over the past few years. We also talk about hurdles to future growth in the market, and the possibility of moving past mutual funds in terms of assets at some point down the line too.
We also discuss some of the key players in the ETF world, and what to do with companies that have exposure to ETFs, but aren’t pure plays. I admit that I was a bit skeptical about this aspect, but Mike makes a case for why some of the giants are more tied to ETFs than you might think, and how you can access some of the private companies with service providers too.
What’s in the Index?
While it shouldn’t be a surprise that a company like WisdomTree (WETF - Free Report) is in the benchmark, considering it is the only pure play ETF sponsor that is a public company, there are others that might be more of a surprise to some investors out there. This includes SEI Investments and CBOE Holdings (CBOE - Free Report) just to name a few.
Mike also discusses the role that index providers play in the world of ETFs, and how important this business is to companies like MSCI Inc. (MSCI - Free Report) and S&P Global (SPGI) as well. Clearly, the ETF world is a bit more diverse than you (and I) initially thought, and it is also more than just a higher growth replacement for XLF. In fact, Mike notes that the benchmark has just a 20% overlap with the index underlying the SPDR financial sector ETF, meaning that this is definitely giving exposure to a unique subset of companies.
So, if you’re an ETF ‘nerd’—like both Mike and I are—definitely check out this week’s podcast for more information on the industry and how to invest in its surging growth prospects too!
But what do you think about investing in the ETF industry? Make sure to write us in at podcast @ zacks.com or find me on Twitter @EricDutram to give us your thoughts on this, or anything else in the fund market.
But for more news and discussion regarding the world of investing, make sure to be on the lookout for the next edition of the Dutram Report (each and every Thursday!) and check out the many other great Zacks podcasts as well!
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