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Portfolio > ETFs

ETFs to Surpass Hedge Fund Assets by 2015

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The summer is typically quiet time for Wall Street, but not in the fast-moving ETF marketplace.

Never mind that a Winklevoss Bitcoin ETF is on the verge of being launched, the adoption rate of ETFs among financial advisors is through the roof.

“We predict annual growth rates of 15%-30% around the globe over the next five years and believe the ETF industry could surpass the hedge fund industry in assets under management during the next 12–18 months,” said EY in its 2014 ETF Global Survey.

ThinkAdvisor’s upcoming virtual workshop “ETFs: From Alpha to Omega and Everything in Between on Thursday, July 24, covers the pulse of the ETF market and is the summer event that no advisor can afford to miss.   

The keynote speaker, Robert Arnott, chairman and chief executive officer at Research Affiliates, will discuss the utility of alternatively weighted indexes in “What’s Smart About Smart Beta? How Useful are Alternative Weighted Index Strategies.

Although the concept of “smart beta” indexes is still controversial, advisors should be fully versed to answer client questions about this topic. According to 2014 ETF Investor Study by Charles Schwab, 39% of surveyed investors want to learn more about strategic beta products that use fundamental or equal weightings and minimize market volatility. Among this same group of people, eight out of 10 want to know how to deploy these types of ETFs inside their portfolios.

Active ETFs are seen as one of the industry’s most promising developments, and “Hyperactive? Actively Managed ETFs Continue their Breakneck Growth” will delve into the product pipeline and very latest with Noah Hamman, CEO of AdvisorShares, and Larry Steinberg of Financial Architects.

At the end of June, there was $16.21 billion invested across 89 actively managed ETFs, according to AdvisorShares.

ETFs that attempt to double or triple their daily performance long or short have been the beneficiaries of uncharacteristically low stock market volatility and in some cases have actually enjoyed returns that beat their underlying indexes.

Among 2014’s top YTD performers are the Direxion Daily Junior Gold Miners Bull 3x Shares ETF (JNUG) +85.20%, the Direxion Daily Semiconductors Bull 3x Shares ETF (SOXL) +72.10%, and Direxion Daily Real Estate Bull 3x Shares ETF (DRN) +65.34%.

In “Should Advisors Embrace or Shun Leveraged and Inverse ETFs?” Sylvia Jablonski, Capital Markets-Institutional Strategist at Direxion Investments will demystify popular folklore about these types of tactically oriented ETFs. The session will also explain the role of leveraged and inverse ETFs inside diversified portfolios.

The U.S. stock market just completed six consecutive quarterly gains at the end of June 30, but many advisors are now trying to expand their clients’ portfolios to noncorrelated equity exposure.

Liquid Alt ETFs: The Many Paths to Attaining Noncorrelation with Stocks,” with Adam Patti, CEO of IndexIQ and Andrew Gogerty, vice president of Investment Strategies at Newfound Research, will examine long-short, global macro, managed futures and other nontraditional investment strategies. Learn about the best way to incorporate these types of tactical investments by attending.

What will the next global financial shock be, and how can you prepare now?

In “How to Avoid Crashes and Boost Returns via Global ETFs,” Mebane Faber, portfolio manager at Cambria Investment Management, and I will discuss the opportunities offered through value investing. Some of the biggest winners are hidden in plain sight, and you’ll discover how to find them.

The ETF workshop begins on Thursday, July 24 at 9:30 a.m. EDT and runs to 5:30 p.m. Don’t miss this summer’s most important ETF investing event. 

Register for the ETF virtual conference.


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