2020 ETF Launches Looked Very Different

In 2020, ETFs broke asset raising records, as noted by Sumit Roy at ETF.com.

Like everything else in 2020, the growth of the ETF industry looked quite different from other years. In this ETF Think Tank research note, we look at the 284 ETFs launched in the US last year that raised, in aggregate, about $18.5 Billion in AUM. We note, as predicted by our ETF Professor, that a majority of the launches focused on innovations and active management as outlined in Dan Weiskopf’s white paper: Measuring Innovation in the ETF Industry. Below, we explore the class of 2020 ETF launches and the differences with the overall landscape of US listed ETFs with data provided by the ETF Think Tank Security Master.

The ETF Halo

The ETF launches of 2020 look very different from the low-cost beta incumbents that currently command the bulk of the assets. For example, in 2020, there were only 5 sector ETFs launched compared to 48 Thematic ETFs. As noted in our ETF Industry KPI report, there were also a lot of new sponsors:

Lastly, as for the number of ETFs and brands, the number of ETF brands surged from 141 to 170 at year-end, although the number of ETFs stayed about the same. We can derive that more institutions and companies are creating ETFs…

As many new sponsors embrace the benefits of the ETF Halo/Structure, we note two trends that dominated 2020 launches: Active ETFs and Option-Based Structured Outcomes.

Active Gets Really Active

The charts below compare the investment approach of 2020 launches to the overall ETF industry.

Active ETFs represent 56% of 2020 launches while Traditional Index based ETFs were only 7%. Non-Traditional Passive (Smart Beta) won the race in terms of new launch asset gathering. These Non-Traditional index funds control 28% of overall ETF AUM, but the class of 2020 took in 46% of the new launch AUM. Active was also impressive at 42% of new launch AUM.

New Options in 2020

There is no doubt that 2020 marked a change in investment approach, but the change in category launches may be even more extreme as depicted in the chart below:

The launches of 2020, relative to Equities and Fixed Income, look pretty normal with just a slight decline in both launches and AUM. The major change is the reduction of Geared (Leveraged/Inverse) ETFs with the simultaneous rise of options-based structured outcome ETFs. In 2020, options-based ETFs accounted for over 21% of launches and 18% of new launch AUM, a significant increase from past years. When looking at the overall industry, this category only represents 5% of listings and 0.21% of AUM.


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).
ETF Industry KPI – 01/18/2021

ETF Industry KPI – 01/18/2021

Week of January 11, 2021 KPI Summary This week, there were 9 new ETF launches

ETF Industry KPI – 1/25/2021

ETF Industry KPI – 1/25/2021

Week of January 18, 2021 KPI Summary This week, there were 7 new ETF launches,

You May Also Like