Lee Kranefuss, the executive who built iShares into the biggest ETF company in the world, today told financial advisors at the Inside ETFs conference that adoption of ETFs would extend far beyond their current level as the virtues of the exchange-traded fund become clearer to advisors.
“We’re really at the beginning rather than the end,” Kranefuss told the industry crowd attending the world’s largest ETF conference. “ETFs allow advisors to do what they always did—but allow them to do it better.”
“The magic of ETFs is that they break compromises because you can adjust to the level of granularity you want,” he added, referring to the universe of more than 1,500 U.S.-listed ETFs. He stressed that neither individual stocks nor mutual funds come close to giving advisors and investors that level of pin-prick precision in their various asset allocation models.
The former iShares chief executive officer's comments were the culmination of the first day of the Inside ETFs conference. The day was filled with a variety of panels and presentations targeting financial advisors who now use ETFs or who are looking for ways to begin using them more. The conference will continue through Wednesday, Jan. 29.
The 7th annual Inside ETFs conference—without question the “see-and-be-seen” event for the industry—comes 21 years after the first ETF was brought to market. Total U.S.-listed ETF assets are now about $1.7 trillion, just shy of a record, according to data compiled by ETF.com.
While those assets are below the $13 trillion in open-end mutual funds or the $6 trillion in hedge funds, asset-gathering continues apace, and the bullish long-term prospects for the industry, as Kranefuss said, are beyond question.
The Rest Of The Conference
Apart from Kranefuss making clear why ETFs are the best tool for advisors today, Inside ETFs attendees starting Monday will hear from a broad range of celebrity speakers both in and out of the financial world.
Among them, the celebrity economist Nouriel Roubini, former Florida Governor Jeb Bush, pro basketball legend Pat Riley and satirical journalists at “The Onion” will address a record-large crowd of more than 1,500 attendees.
The four-day event will also include other luminaries, such as passive investing advocates Larry Swedroe and Wharton School Finance Professor Jeremy Siegel. Additionally, some of the most influential women in the world of finance will be there, including Charles Schwab’s Chief Investment Strategist Liz Ann Sonders, and Sallie Krawcheck of 85 Broads.
The list of speakers is as diverse as that of attendees, which include index providers from around the globe, ETF issuers of all sizes, registered investment advisors, ETF strategists and a slew of individual investors, all of whom will talk ETFs for four days.
The conference comes at a time when investors are bracing for the much-anticipated tapering of quantitative easing, which the Federal Reserve kicked off this month.
Concerns over the pace of U.S. economic growth, and prospects for higher rates ahead, have many rethinking—and rebalancing—their exposure to both fixed income and equities.
This year’s lineup of events will include key discussions on how to best use ETFs in today’s environment, including the changing fixed-income landscape, the growing demand for smart-beta strategies—which continue to take in assets at an accelerating pace—and the role of active management in a largely passive space.
Inside ETFs takes place Jan. 26-29 at the Westin Diplomat, in Hollywood, Fla.
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