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August 20, 2015 at 12:02 PM
Thought the first U.S. exchange-traded fund was launched around 1993, ETFs were still gaining traction in 2004 when Paul Frank launched his own ETF-based mutual fund.
Today, ETFs have become popular investment vehicles, hitting nearly $2 trillion in U.S.-listed ETF assets and nearly $3 trillion globally.
Frank’s fund, the Stadion Tactical Growth Fund, is one of a few ETF-mutual funds with a 10-year track record.
“It’s proven itself,” said Frank, who still manages the fund. “There’s been up markets and there’s been down markets and it’s done well.”
Stadion’s Tactical Growth Fund shifts between domestic equity ETFs, international equity ETFs and a defensive allocation based on its proprietary Sharpe Ratio analysis.
When he launched the fund out of his one-man RIA firm in 2004, Frank was one of the first managers to utilize ETFs within a traditional ’40 Act mutual fund.
“When I first launched it, I said ‘these ETFs are going to be big,’” Frank said during a visit to ThinkAdvisor’s office in New York.
He has since linked up with Stadion Funds in 2013, and over the last six months the fund has doubled its assets under management to more than $200 million.
While it had been on UBS and LPL platforms, just in the last month it made it onto Wells Fargo and Merrill Lynch platforms.
Frank recently talked to ThinkAdvisor about how ETFs have changed over the past 10 years and the current trends in the ETF marketplace.
More Options, More Money
In 2004, Frank’s fund was tracking “maybe 125 ETFs,” he said. Today, it tracks more than 1,300 ETFs on a daily basis.
The overall number of ETFs has increased and so have the variety and array of options within the ETF marketplace today, Frank said.
“The U.S. was covered pretty well in ETFs back in ’04,” Frank said. “Obviously there’s a lot more sector funds out now, they get a little bit more specific and drill down a little bit more. Back then you could still get your S&P weighted a couple different ways.”
