ETFs' Future: Huge Growth

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February 04, 2014
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Exchange-traded fund assets will top mutual fund assets within 10 years, and we’re making ETF Analytics free. Here's why.

Last week, we announced the launch of ETF.com and presented our vision for the future of ETFs during our annual keynote presentation at the 2014 Inside ETFs conference.

We made some bold predictions and significant announcements at the conference, including:

  • ETF assets will top mutual fund assets within 10 years
  • We are rebranding as ETF.com
  • ETF.com will offer its $2,000/year ETF Analytics service to all investors for free

The announcements raised quite a few eyebrows and elicited a lot of questions. We thought we would explain our reasoning here.

What follows is a digest of our keynote presentation. It is intentionally rough and conversational, as was the keynote itself.

A Battle For The Soul Of Investing

We believe we’re in the throes of a battle for the heart and soul of investing. Like all good battles, this one is also between good and evil. Specifically, it’s between those that would make investing cheaper, more efficient and more effective and those that would claw back money through false hope, distribution fees and slick marketing materials. Our goal with ETF.com is to make sure the good guys win.

Our vision for how that happens and our rationale for making ETF Analytics free is not complex. In fact, it’s based on three simple concepts:p

  1. The ETF revolution is really just getting started.
     
  2. There are some bad things happening that concern us, and could derail the growth and positive change the ETF revolution is bringing about if they’re not dealt with.
     
  3. The key to the future is leveling the playing field for investors, and we aim to do just that.

Let’s walk through each one of these three.

The ETF Revolution

First, a bit of a history lesson, so we can put our prediction about ETF asset growth in context.

ETP Asset Growth

Here’s a chart everyone’s seen at least once by now. It shows ETF assets under management by year since the day the S&P 500 SPDRs (SPY | A) started trading in 1993. Let’s talk about where this impressive growth came from.

 

ETF.COM CHANNELS

Want to learn more about smart-beta ETFs? Check out our smart-beta guide, essentials library and ETF screener!

ETF DAILY DATA

'VTI,' Vanguard's U.S. total market fund, led inflows on Wednesday, July 1, as total U.S.-listed ETF assets climbed to $2.123 trillion.

A slew of iShares funds paced the firm's issuer-leading inflows on Wednesday, July 1, as total U.S.-listed ETF assets rose to $2.123 trillion.

ETF.COM ANALYST BLOGS

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Why is putting a client’s interest first not the industry standard?

By Matt Hougan

Contrarian plays, bad investing and authenticity in social media dominated the day.

By Dave Nadig

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By Olly Ludwig

The ETF world is a hotbed of interesting new ideas, as this week’s launches make clear.

ETF INDUSTRY PERSPECTIVE

By Invesco PowerShares

Smart beta appears to be poised for further growth.

By Dorsey Wright & Associates LLC

So many sectors, how do you choose? A quick guide from Dorsey Wright.

By Nasdaq Global Indexes

Bond exposure or bond performance? Only defined maturity indexes provide the latter.