The ETF industry’s expansion into novel investment strategies is reshaping how investors access markets, industry experts said at Bloomberg’s annual ETFs in Depth conference in New York on Thursday.
“More and more people are managing more of their own finances, investing more of their own money, taking more control,” said Will Rhind, founder and CEO of GraniteShares.
Investors have diverse goals and mindsets, with some seeking to make 10% in a day rather than 10% in a year, Rhind said. As product providers, “we’ve got to be realistic and honest” that there is no single “average” investor, he added.
The evolution comes as ETF issuers launched 646 new funds in the United States through November, according to data from ETFGI. Globally, issuers have introduced a record 1,787 new products in the first 11 months of the year, surpassing the previous record of 1,619 set in 2021.
This surge in new products stems partly from regulatory changes that enable more complex strategies, according to Mike Venuto, chief investment officer at Tidal Financial Group. The ETF Rule and derivatives regulations have opened doors for products like single-stock ETFs and other specialized offerings, he explained.
Jay Jacobs, U.S. head of thematic and active ETFs at BlackRock, noted that while traditional index-tracking funds remain important, investors are increasingly seeing specialized strategies to diversify their portfolio.
After a decade where basic market exposure delivered strong performance, investors are now looking for more sophisticated approaches to achieve their investment objectives, Jacobs explained.
The panel highlighted how market dynamics are influencing product development. According to Rhind, his firm sees daily trading volume of $2 billion to $3.5 billion across their products, with heavy participation from proprietary trading firms and hedge funds.
The evolution extends to digital assets, where bitcoin ETFs have accumulated over $100 billion in assets within their first year. “We’re still really just at the tip of the iceberg in bitcoin, and definitely even less with Ethereum right now,” Jacobs said.
The next phase of innovation in digital asset ETFs will focus on wider adoption rather than new product types, according to Jacobs. “Just a tiny fraction” of advisor clients currently hold bitcoin ETFs, and institutional adoption remains limited, with many platforms still restricting access to these products, he explained.
Looking ahead, Rhind pointed to opportunities in high-yield strategies, revealing plans to launch a yield boost family combining two popular trends–leveraged and options-based income. These products aim to deliver some of the highest yields in the U.S. market, he said.
