Ric Edelman-Inspired ETF Rakes In Assets

April 02, 2015

The iShares Exponential Technologies ETF (XT), which has become a nearly $600 million fund in less than two weeks, began as an apple in Ric Edelman’s eye—a notion that the world was ready for a “new economy” fund folded into an ETF wrapper.

Edelman, founder and chief executive officer of Edelman Financial, began on his own to research the need for a fund targeting a multitude of next-generation technologies that will be crucial to the future of global capitalism. Once he became convinced his clients would benefit from such targeted investment exposure, Edelman persuaded the biggest ETF company in the world to build it. iShares was only too happy to oblige.

Two days after the ETF came to market, Edelman put his money where his mouth is, plowing 4 percent of his firm’s $14 billion in assets under management into the new fund from iShares that’s organized around a Morningstar index. On its second day, XT had $560 million in assets under management—just about all of it from Edelman’s firm—catapulting it to viability and legitimacy overnight. 

ETF.com: Can you go down the list and give me the broad brush strokes of the salient themes and industries that are in focus in this ETF?

Edelman: The subjects include robotics, artificial intelligence, machine learning, nanotechnology, bioinformatics, sensor technology, financial services innovation, energy and environmental systems, neurosciences and of course, medical sciences. The list goes on and on.

What we eventually realized is that our investment portfolios did not specifically address this new and increasingly important theme. It's not a sector of the market; it's not like buying manufacturing stocks. It's not a geographic issue either. It's a fundamental theme.

And we do have themes in our portfolios currently. We have, for example, real estate; we have natural resources. And we began to realize that we ought to have a theme of exponential technologies in our portfolios.

ETF.com: I think of Edelman Financial as Bogle-like, with an RIA twist. You're an ETF guy, you believe in indexing. You probably read “A Random Walk Down Wall Street.”

Edelman: Yes.

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