Exchange Traded Funds (ETFs):

The Increasingly Dominant Package Product of Choice

Recently Released!!!
Date Published: April 17, 2024
Summary PowerPoint Deck: 293 Slides
Reference PowerPoint Deck: 1,467 Slides

The purpose of this research is to provide readers with a comprehensive understanding of exchange traded funds (ETFs), including the historically dominant passively managed exchange traded funds (ETFs) & the emerging actively managed exchange traded funds (ETFs). BlackRock, The Vanguard Group, & State Street Corporation (State Street Global Advisors) dominate the market. This research is incorporated into Tiburon's coverage of both registered investment companies and that of index investing.

This research starts by summarizing the key driving factors behind the rapid growth in exchange traded funds (ETFs), including exchange traded funds' (ETFs') advantages:
  • Strategic Asset Allocators
    • Incremental Lower Expenses
    • Improved Transparency
    • Additional Tax Efficiency
    • Lack of Cash Drag
  • Market Timers
    • Liquid & Continuously Priced
    • No Redemption or Short-Term Trading Fees
    • Ability to Place Stop-Loss, Market, & Limit Orders
    • Eligibility for Margin Purchases
    • Advantageous Short Sell Rule
This research addresses the critical historical phases of exchange traded funds (ETFs), including:
  • Emergence Phase
  • Rapid Growth Phase
  • Dominance Phase
This research defines the market growth and the leading exchange traded fund (ETF) sponsors.

This research defines the key exchange traded funds (ETFs) product markets, including:
  • Passively Managed Exchange Traded Funds (ETFs)
    • Passively Managed Equity Exchange Traded Funds (ETFs)
    • Passively Managed Fixed Income Exchange Traded Funds (ETFs)
  • Actively Managed Exchange Traded Funds (ETFs)
    • Actively Managed Equity Exchange Traded Funds (ETFs)
    • Actively Managed Fixed Income Exchange Traded Funds (ETFs)
This research addresses the key markets & distribution channels for exchange traded funds (ETFs), including:
  • Discount & Online Brokerage Firms
  • Financial Advisor Channels
  • Institutional Markets
And this research makes several future predictions for exchange traded funds (ETFs), including:
  • Additional Conversions of Open-End Mutual Funds into Exchange Traded Funds (ETFs)
  • Substantial Growth in Exchange Traded Funds (ETFs), with Any Potential Capital Gains Tax Increase to Potentially Drive Even Further Adoption
  • The Vanguard Group to Continue its Net Flows Success & Surpass BlackRock as the Exchange Traded Fund (ETF) Assets Under Management Leader
  • Continued Dominance of Net Flows by Passively Managed Exchange Traded Funds (ETFs), with Actively Managed Exchange Traded Funds (ETFs) to Capture About Twenty Percent of Net Flows Over the Next Five Years
  • Continuing Substantial Price Competition
  • Two of Three Incumbent Core Open-End Mutual Funds Markets (Managed Account Programs & Fee-Based Financial Advisors (RIAs)) to Continue to Migrate to Exchange Traded Funds (ETFs) with Defined Contribution Plans Held Up by Operational Challenges and Instead Migrating to Lower Cost Collective Investment Trusts (CITs)
  • Substantial Global & International (Non-United States) Exchange Traded Fund (ETF) Markets
  • Continuing Modest Number of Exchange Traded Fund (ETF) Sponsors Venture Capital Investments
  • Continuing Modest Number of Exchange Traded Fund (ETF) Sponsors Mergers & Acquisitions
  • Limited Exchange Traded Fund (ETF) Firms Initial Public Offerings (IPOs)

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