Written by Heather Bell
Yesterday, Exchange Traded Concepts brought to market the somewhat self-referential ETF Industry & Financial Services ETF (TETF). The fund targets publicly traded companies that are involved in the management, servicing, trading or sale of ETFs. The fund comes with an expense ratio of 0.64% and tracks the Toroso ETF Industry Index.
Given that assets invested in ETFs are heading at a steady pace toward $3 trillion, an ETF targeting its own industry isn’t as far-fetched as it would have been, say, five years ago. The number of issues since that, according to a press release from Toroso Investments, has jumped from 45 to 78 during that time, while assets under management have more than doubled from $1.2 trillion.
Said Toroso Investments CEO Guillermo Trias:
“Not only are we seeking to capture the performance of the industry, but we’re also looking to bring together many of its leaders to leverage their authority as we monitor, research, and benchmark the category’s potential future growth.”
According to Toroso CIO Mike Venuto, the impetus for the index underlying TETF had its origins in his firm’s efforts at
“illuminating what goes on in the ETF space. It’s been very difficult for people to invest into the ETF industry itself and into that growth, which has been around 20% a year.”
A Wide-Reaching Index
TETF doesn’t cover just issues like BlackRock, owner of the iShares brand, or WisdomTree. It has a wide reach, according to its prospectus, covering
Companies in the index must have a market capitalization of at least $200 million and meet liquidity requirements. Currently, the index has 37 components.
Venuto, who describes the ETF industry as more of an ecosystem than just a standard industry said further:
