2015 Fall ETP Forum: Industry’s insiders confirm exchange traded products are here to stay

Posted by on

The 2015 Fall ETP Forum, organized by Expert Series, kicked off last Friday at The New York Athletic Club, bringing together some of the notable new players in the ETF business. Gregory FCA was on hand to take in the event and shoot some video of the conference’s thought leaders.

Kevin O’ Leary (@kevinolearytv), ABC’s Shark Tank co-star and Chairman of O’Leary Funds, kicked off the day as the morning’s keynote speaker. The seasoned entrepreneur and famous “Mr. Wonderful” reiterated his investment philosophy, which was passed down from his mother: “In cash I trust.” Translation? If an investment doesn’t generate cash from dividends, it might as well be considered shark bait, because dividends are the only return that guarantee income. This inherent passion for dividend-paying investments led O’Leary to confidently enter the ETF arena with the creation of his own ETFs that embody his investment criteria: low volatility, quality and dividend yield.

O’Leary’s keynote was an excellent segue to the #ExpertSeries2015 points of discussion. ETF sponsors, managers and investors made one thing clear: exchange traded products are here to stay. Here are four reasons why:

  1. Successful ETFs tell a story. During the Emerging ETF Manager Roundtable, Kevin Kelly, CIO of Recon Capital Partners (@ReconKevin), emphasized that successful ETFs speak to the investor. For instance, ETFs labeled with memorable tickers and those that capitalize on promising technological advances have proven to withstand market competition and better attract investors.
  1. ETFs are multi-functional tools. Investors are increasingly recognizing that ETFs take thebenefits of mutual fund investing to the next level. ETFs offer lower operating costs than traditional open-end funds, flexible trading, greater transparency and better tax efficiency. Quite simply, ETFs provide solutions to many investor hurdles in one vehicle—and that is very attractive to them.
  2.  ETFs reduce volatility through diversification. As the old saying goes, you don’t want to put all of your eggs in one basket. ETFs provide easy access to different sectors, industries, styles and capitalizations of the market.
  3.  The ETF world is becoming democratized. Exchange-traded structures have made asset classes and investment strategies historically accessible only to the largest and most sophisticated investors available to the masses. ETFs have evened the playing field among investors when it comes to global accessibility.

If there was one takeaway from the Fall ETP Forum, let it be this: With more than $2 trillion in U.S.-listed ETF assets, the demand from financial advisors and institutional investors continues to grow for what many hail as the investment vehicle of the future.

Editor’s Note: This post is a collaboration between Jen Diehl and another member of the Gregory FCA team, Amy Lash.