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The Tidal Financial Group (Tidal) expanded rapidly over the last decade and encompassed multiple ETF related brands including Toroso Investments, Tidal ETF Services, and the ETF Think Tank. Going forward all activity will be unified under the Tidal brand as we become one company, dream, family, and platform focused on holistic ETF customer solutions.

Everything is Growing

At the ETF Think Tank, we research the opportunities and pitfalls of the growth of the ETF Industry. This research is intended to support the growth of advisors and the portfolios of clients. Growth is a common theme throughout these concepts, but goes beyond just assets and includes innovations, client service and research insights. So far in 2020, despite massive social, economic and health challenges, many financial instruments connected to ETFs have experienced substantial growth.

The chart provided above from Eric Balchunas highlights the near-record flows for ETF assets, despite the volatility of 2020.

In past research, the ETF Think Tank has contended that a market downturn would result in an ETF asset boom, due to investors leaving mutual funds when markets slide but choosing to invest through ETFs when they return.
 

Return of the Retail Investor

Beyond ETFs, the retail investor has returned through new platforms like Robinhood and SoFi Invest. This phenomenon was accredited to the lack of sports betting in the early days of the pandemic, but as the chart below shows, it appears to be here to stay. Many of these investors use ETFs or individual stocks, but no mutual funds. The chart below from Robintrack.net compares the performance of the S&P 500 to the trading activity of Robinhood users.


Direct Indexing Acquisition Growth

Direct Indexing has been called a potential ETF killer. At the ETF Think Tank, we have seen it more as a compliment, driving mutually beneficial growth. That said, large traditional institutions have used acquisitions to enter this 25-year-old industry of customization in a big way in 2020. Fellow ETF Nerd Nate Geraci provides commentary on three of the biggest deals in this space so far this year:


Bitcoin’s Volatile Growth

Many ETF-focused investors look to Greyscale Bitcoin Trust $GBTC when seeking Bitcoin exposure. To be clear, $GBTC IS NOT AN ETF. That said, it does show the demand from traditional investors when we go back to Nate Geraci to look at the billions in flows during 2020.

There are many opinions on the volatile price movements of Bitcoin and the overall growth of the protocol network value. Beyond price, institutional adoption has grown exponentially with adoption by CEOs of public companies like Michael Saylor and Jack Dorsey. Nate also pointed out that traditional fund managers like Guggenheim are now embracing the crypto-currency opportunities.


Bottom Line Growth

Without a doubt, 2020 has been difficult, terrible, and sometimes tragic. That said, the innovations in financial services linked to ETFs have seen massive adoption and growth. Although this small bright spot in our industry is encouraging, it is important to remember and respect that the pandemic also continues to grow. Be diligent, stay safe and celebrate small victories.

Disclosure

The information provided here is for financial professionals only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

All investments involve risk, including possible loss of principal.

The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested, and can be affected by changes in interest rates, in exchange rates, general market conditions, political, social and economic developments and other variable factors. Investment involves risks including but not limited to, possible delays in payments and loss of income or capital. Neither Toroso nor any of its affiliates guarantees any rate of return or the return of capital invested. This commentary material is available for informational purposes only and nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security and nothing herein should be construed as such. All investment strategies and investments involve risk of loss, including the possible loss of all amounts invested, and nothing herein should be construed as a guarantee of any specific outcome or profit.  While we have gathered the information presented herein from sources that we believe to be reliable, we cannot guarantee the accuracy or completeness of the information presented and the information presented should not be relied upon as such. Any opinions expressed herein are our opinions and are current only as of the date of distribution, and are subject to change without notice. We disclaim any obligation to provide revised opinions in the event of changed circumstances.

The information in this material is confidential and proprietary and may not be used other than by the intended user. Neither Toroso or its affiliates or any of their officers or employees of Toroso accepts any liability whatsoever for any loss arising from any use of this material or its contents. This material may not be reproduced, distributed or published without prior written permission from Toroso. Distribution of this material may be restricted in certain jurisdictions. Any persons coming into possession of this material should seek advice for details of and observe such restrictions (if any).

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