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

Interested in China? Use our China ETFs Channel, library, and ETF screener.

Interested in oil? Use our oil ETFs channel, library and ETF screener!

ETF DAILY DATA

The gold ETF took in nearly $860 million on Monday, May 2, as gold prices spiked near $1,300.

SSgA and Invesco PowerShares saw the largest ETF outflows of all issuers on Monday, May 2.

ETF.COM ANALYST BLOGS

By Drew Voros

With the broad equity ideas all taken, issuers look for thinner slices of exposure.

By David Lichtblau

How funds wash away capital gains through create/redeem process.

By Dave Nadig

End investors are the big winners; brokers—not so much.

By Dave Nadig

ETF industry petitions the SEC for market microstructure changes.

ETF INDUSTRY PERSPECTIVE

By Adam Patti

ETFs are more tax efficient than mutual funds.

By Sprott Asset Management

New fund’s underlying index targets equities sentiment on social media.

By Kristi Kuechler

Avoid taking unrewarded—or unintended—risks.