ETFs' Future: Huge Growth
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
- The ETF revolution is really just getting started.
- 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.
- 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.
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.
Here’s how exchange-traded funds trade and what kind of orders are used.
Managing the premiums on the China A-shares fund ‘ASHR’ has been challenging, but things should get easier over time.
Which is better, banking on a dividend or on price appreciation?
While the fat lady hasn’t sung yet, these three ETFs strike me as the coolest launches of the year.