It’s Thanksgiving week, so we thought we’d take a quick moment to think about things we are grateful for.
Topping our list is the ETF industry itself.
From a product standpoint, we’ve all seen the topline figures reaffirm relevance, usefulness, and continued growth of ETFs:
- We’re flirting with a record product launch pace in 2023 – ETFs now exceed 3,300 in the U.S. market, and we are still welcoming first-of-a-kind strategies 30 years in.
- ETF closures have been equally healthy, confirming that while the ETF market is welcoming, only meaningful solutions survive, noise does not. The launch-to-closure ratio sits around 2 today.
- Conversions from other wrappers into ETFs are an increasing part of that growth story, validating this structure as best in class.
- Asset creations are nearing $400 billion year to date, pointing to consistent and growing adoption, especially in challenging markets.
The data and market trends confirm the value proposition of the ETF structure – what we like to call structural alpha relative to other investment vehicles. By all measures, the ETF wrapper is having a banner year of success, and we are thankful for that.
ETFs as an industry tell an equally remarkable story. Look at our ETF Industry Index (TETF), which tracks all parts of the ETF ecosystem, from product sponsors to distributors to exchanges to data providers.
Back in 2017 when we created the TETF Index, we did it out of conviction that this corner of asset management was special, anchored on a product structure that simplifies, improves and broadens market access through lower cost, better tax efficiency, transparency and liquidity.
Since inception, the TETF Index has, in fact, outpaced the S&P 500’s Financial Sector by a wide margin; it has far outpaced banks (as measured by the KBW Nasdaq index); and it has kept up – or outpaced – the broader S&P 500 index throughout its run. This is an industry in growth mode, and we are grateful for being a part of it.
TETF Index Vs. Everyone Else
More importantly, it all comes down to people. We are grateful for the many people who make the ETF ecosystem a happy, collaborative place to be.
Yes, it may be cheesy, but it’s Thanksgiving, so here we go: Thanks to the cool, creative, entrepreneurial people who give this industry its one-of-a-kind collaborative, constructive and mission-driven flavor. You know who you are.
Maybe it’s the problem-solving mindset that pushes us – collectively and collaboratively – to work smarter at creating, innovating, and ultimately improving investor outcomes through ETFs. Maybe it’s the shared purpose of broadening and improving market access that unites and motivates us to keep disrupting.
Whatever fuels us as an industry, there’s no question that the ETF ecosystem is built on partnerships and on trust. We could not be more grateful for that partnership and for the trust we’ve shared with you at the ETF Think Tank and at Tidal. We know it takes a village to create, run, and transact in an ETF, and we are so thankful for being in this business with every one of you.
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