A new investment category has emerged at the crossroads of artificial intelligence and infrastructure, and it is attracting billions of dollars of investment capital

While there are many exchange-traded funds in the marketplace offering exposure to the theme of artificial intelligence, there is a rising need for a product that provides exposure to what Goldman Sachs labels “the next phase” of the artificial intelligence investment, AI infrastructure.1 Indeed, a new investment category has emerged at the crossroads of artificial intelligence and infrastructure, and it is attracting billions of dollars of investment capital. Some of the world’s largest investors are racing to fund the physical infrastructure required to power AI computations, from processors to data centers to power plants.2

While some of the early investment beneficiaries of generative AI adoption were software applications and semiconductor chip makers such as Nvidia, Goldman Sachs research predicts the next phase of the AI trade will be in AI Infrastructure. Goldman anticipates companies that stand to benefit from the buildout of AI-related infrastructure will include semiconductor designers and manufacturers, cloud providers, computer and network equipment makers, data center real estate investment trusts, utilities, and security software providers.3

Amid the boom in AI, computing power has emerged as one of the decade’s most critical resources, as servers run 24/7 around the globe processing the
models and applications underpinning AI. The energy, resources, and capital required to support the AI revolution are enormous. A report from private policy think tank RAND projects the world could need 68GW of extra energy capacity by 2027 to deal with AI growth, and 327GW by 2030.4 McKinsey & Company estimates that by 2030, data centers will demand nearly $7 trillion globally in electricity to meet the need for computing power.5

1 Goldman Sachs, AI infrastructure stocks are poised to be the next phase of investment, April 16, 2024.
2 Giacobone, Bianca. The rise of the AI infrastructure asset class, Latitude Media, December 10, 2024.
3 Goldman Sachs, AI infrastructure stocks are poised to be the next phase of investment, April 16, 2024.
4 Pilz, Konstantin, Yusuf Mahmood, Lennart Heim. AI’s Power Requirements Under Exponential Growth, RAND.org, January 28, 2025. https://www.rand.org/pubs/research_reports/RRA3572-1.html
5 Noffsinger, Jesse, Mark Patel, Pankaj Sachdeva, et al. The cost of compute : A $7 trillion race to scale data centers, April 28, 2025.

Financial advisors aim to grow their practices and serve more clients, but it can be challenging to do so without sacrificing quality. Thankfully, model portfolios offer a path forward.

Think of model portfolios as investment blueprints that advisors can customize to the needs of each client. They use them to scale their practice, streamline asset allocation, support clients’ investment goals, and improve distribution strategies — all while boosting profitability and simplifying the investment process. 

Here’s everything you need to know about the benefits of model portfolios for advisors, from key statistics to how to use them to balance scale and customization.

Why should financial advisors use model portfolios?

Creating a portfolio from scratch can feel overwhelming. Let’s look at how model portfolios offer a solution to this otherwise complex, intimidating process.

What is a model portfolio?

Model portfolios give financial advisors and financial services professionals a ready-made investment strategy that can be deployed to meet their clients’ goals. 

Typically, model portfolios include an array of investment products. These can include stocks, bonds, ETFs, index funds, mutual funds, real estate, and more. The diversification helps spread and minimize risk so investors can more easily meet their individual goals.

Benefits of model portfolios

Model portfolios have many benefits for advisors and their clients, including:

They simplify the investment process and provide a diverse range of investments. 

Putting together a balanced portfolio that meets investor needs requires a lot of overhead work. There are many factors to consider, but a good model portfolio has done that work in advance and created a turn-key solution for financial services professionals.

Rather than researching and vetting dozens of individual funds or securities across different markets, advisors can offer clients a curated mix of investments that work together as a complete portfolio. This would take considerable time to assemble independently, but model portfolios deliver it as a ready-made package.

They reduce the need for ongoing portfolio maintenance. 

Portfolios often require fine-tuning and adjustment. But most model portfolios come with built-in professional oversight, meaning investment teams monitor market conditions and make adjustments when needed.

When rebalancing is required, it happens systematically across all clients using that model, rather than requiring individual advisor attention for each account. This removes the burden of constantly tracking portfolio drift, timing rebalancing decisions, and executing trades.

They reduce the need to build a portfolio from scratch. 

Model portfolios eliminate most of the heavy lifting of building a portfolio because the most critical work is already done for you. Instead of spending hours determining investment objectives, researching asset allocations, and stock picking, bond picking, and mixing in the right ETFs or mutual funds, you start with a professionally constructed framework.

The portfolio structure, asset mix, and security selection have been handled by investment teams with institutional resources. You simply choose the model that aligns with your client’s risk tolerance and goals, then customize as needed. This means you can move from client consultation to implementation in a fraction of the time it would take to build everything from scratch.

They minimize risk. 

Because model portfolios err on the side of increased diversification, they minimize investment risk. A spread of assets, vehicles, and investment types means a collapse at any one corner of the market is unlikely to upend the investment.

This also gives advisors a defensible approach when the market is volatile. Rather than second-guessing individual choices, they can point to the systematic risk management and stress testing that went into the model’s construction — institutional-level analysis that most advisors lack the resources to conduct on their own. 

They provide a more cost-effective way to track performance. 

Because they are typically time tested and widely used, model portfolio performance is easier to track than a bespoke portfolio.  

Standardized models come with benchmarks and readily available performance data, eliminating the need for custom analysis tools or expensive third-party tracking services. Advisors can compare results against industry standards and explain performance drivers to clients without spending hours creating custom reports.

How model portfolios help balance scale and customization

Arguably the biggest draw for model portfolios is how they effectively balance scale and customization. Because they are designed to meet the needs of a large group of investors, model portfolios are an easy way to scale up a financial advisor’s practice.

Here are the benefits that financial advisors can expect when using model portfolios to balance scale and customize investment strategies for their clients.

1. Greater efficiency

Model portfolios automate the time-consuming work that typically bogs down advisors. Instead of manually tracking when portfolios drift out of balance or spending hours executing rebalancing trades across dozens of client accounts, the system handles these tasks automatically. 

Real-time updates mean advisors always have current information. When markets shift or adjustments are needed, the changes happen systematically across all relevant accounts. Advisors can serve more clients with less hands-on portfolio management, allowing their practice to grow without burning out.

Asset managers and advisors can lean on index partners such as VettaFi to help build model portfolios that can deliver customized investment strategies.

2. More flexibility

Model portfolios offer advisors flexibility, allowing them to adapt rather than stick to a rigid, one-size-fits-all approach. The customization options are extensive. Investment advisors can target allocations and incorporate or exclude certain sectors, emphasize income-generating investment strategies for retirees, or tailor client portfolios to meet specific client goals. 

Clients feel heard and understood when their values and goals are reflected in their long-term investments, leading to higher satisfaction and retention. Satisfied clients make referrals, helping advisors grow their practices. The ability to offer both professional-grade portfolio construction and customization gives advisors a competitive edge.

3. Simpler investment management

One of the chief benefits of model portfolios as an investment solution for investors is that they are easy to understand. They often clearly articulate what the investment goal is and the path that is being taken to meet that investment goal. This means advisors will be spending less of their time having to convince or explain to a client why they are making the investment decision they are.

Additionally, they eliminate the need to make a portfolio from scratch. Creating a portfolio is a complex task, and model portfolios eliminate a majority of that work.

4. Cost-effective account management

Outsourcing model portfolios and portfolio construction reduces operational costs compared to managing individual investments in-house.  The time, energy, and brain power that is spent on day-to-day management can instead be spent on unlocking other discoveries and prioritizing other objectives. This is good for the financial advisor and the client. 

Model portfolios can incorporate any investment strategy a client needs: index funds, active funds, ETFs, mutual funds, stocks, bonds, and more. They save on costs because they allow advisors to outsource daily account and investment management, so they can devote their time to developing their practice and building better client relationships.

5. Less risk

Investors ultimately want to protect and grow their principal investments. Model portfolios are designed to balance potential returns within each client’s risk tolerance, helping protect their principal while still creating opportunities for growth.

They allow advisors to leverage the expertise and talents of professionals who are adept at handling rebalancing based on current market conditions. Additionally, they are built for diversity of investments in multiple asset classes. This is essential in terms of protecting investments against market fluctuations, volatility, and macroeconomic surprises.

Key model portfolio statistics for financial professionals

According to Morningstar, investment professionals and advisory services are growing in popularity. As of March 31, 2025, model portfolios accounted for $626 billion in assets under advisement. This includes $38 billion in flows, which is a 62% increase since Morningstar’s 2023 report, which reported $23 billion in flows.

Blackrock is a big driver here. They remained the largest third-party model portfolio provider with $168 billion in assets under management. 

This kind of growth is important to keep in mind, especially given the recent surge in actively managed stock and bond ETFs in the last few years. Model portfolios are likely to begin incorporating that trend going forward. 44% of models reported at least one actively managed ETF in their holdings. 

Active ETFs offer some critical advantages in uncertain market environments, and tend to have lower expense ratios than mutual funds, along with the superior tax efficiency that comes as part and parcel of the ETF wrapper.

Looking for model portfolio solutions?

If you’ve been seeking a customized model portfolio, partnering with an index provider and partner like VettaFi could give you a serious advantage. Index providers have access to data and the ability to backtest. 

"Custom indexing implements a unique investment process or thesis, the same way an active manager does, but in a systematic way that allows for a backtest, yet is not dependent on a star manager,” said VettaFi Head of Index Product, Dalton Eastwood, CFA. “VettaFi has been building custom indexes for clients for over 10+ years. Most Advisors are not yet aware they could have a custom index built specific to their clients needs."

Reach out to our team now to learn more about customized indexes, data, and benchmarking support for your model portfolio.



Today, financial advisors have access to an extensive array of investment products to create precise portfolios for their clients. For asset managers, however, this creates a challenge. 

Breaking through the noise and reaching prospective advisors and investors is harder than ever. In this guide, we'll help you better connect with financial advisors.

Don't sacrifice long-term success for short-term wins

Aside from the challenge of standing out in a crowded field, asset managers are contending with product fee compression. Profit margins are being squeezed, and sales and marketing teams are increasingly pressured to prove their value and justify their spend. 

As such, we see marketing teams lean into  lower-funnel tactics at an accelerating rate and drop brand-building programs from their media mix. Why?

Lower-funnel measures can tie more easily and closely to sales, making reporting back to management on the results of marketing spend easier. 

Unfortunately, this can come at an expense over the long term. Marketers are trading success that compounds over time for easy, short-term wins today. Full-funnel approaches are critical to driving long-term success. Every stage of the funnel has a role to play in your media mix, and if designed correctly, they will work together to convert prospects into clients. Thus, asset managers should know some marketing tactics.

Once you realize the importance of the full funnel, the next step is optimizing your campaigns by leveraging data smartly and finding the right partnerships to continue your growth journey. 

 

In my storied career as a copyologist, I have noticed a few common pitfalls repeatedly made by novice or beginner copywriters. The astute among you might be thinking right now, “I bet he’s demonstrating some mistakes with this preamble.” No. I am not. Everything here is flawless.

Here are the common mistakes I see:

1. Your marketing copy is trying to explain everything

Like the first act of a mediocre screenplay, the most common mistake a copywriter can make is too much exposition. Far too often, when composing marketing emails for virtual events or website copy, writers feel the need to explain absolutely every nuance about the product.

Stop that.

There is a time and a place for a good old-fashioned deep dive. Case in point: This article is an explainer on an insights blog. I can spend 1,200+ words espousing copy wisdom. If this were an email, it would be booted straight to a spam folder.

Less is more. 

For example, if you want a friend to see the movie “There Will Be Blood,” what do you think will be more effective: 

  • Showing them a clip of Daniel Day-Lewis shouting, “I drink your milkshake.” 

  • Explaining to them directly that “There Will Be Blood” is a 2007 film from legendary director Paul Thomas Anderson, who is known for “Magnolia,” “Hard Eight,” “Inherent Vice,” and more. It centers on a ruthless, shrewd prospector who pivots from precious metals to oil after stumbling across a large oil field. He tricks local landowners into selling seemingly barren land to build his empire. The film’s themes center around greed, obsession, family, and pride.”

Your audience doesn’t need to know all the context; they simply need to be compelled. Show me the electric performance and even though I don’t know anything else about the film, I’m in. Explain the plot and the themes, and I fall asleep. And no, it's not the narcolepsy or the extremely late night filled with too much rose and not enough water. 

2. You are not thinking about your audience when you compose marketing copy

Related to the above, when we’re in our head and have a cool idea, we are fundamentally in a different place than an audience. We are excited to share something that we understand inside and out.

People are exhausted; thus the people you are writing for are exhausted. They work too hard, they have complex family situations, they are getting spam called every other hour, and, to top it all off, a firehose of useless emails are flooding their work inbox, their personal inbox, and their old personal inbox that they keep meaning to go through but never find the time. Have you ever done laundry? Have you ever noticed that no matter how often you do it, you still need to do it? 

Managing day-to-day existence is brutal. 

The last thing anyone has the bandwidth to do is absorb a granular explanation of the topics you will cover in your upcoming virtual event about the importance of grain futures. 

Copy is an invitation. You need to be brief. It is the marketing equivalent of a friend saying, “Hey bud, we’re going to hit [your local bar’s name here] and grab some drinks if you want to join us. No pressure.” 

It should not be “Hey man, I’m going to head to [your local bar’s name here] with [a long list of friends and people you don’t know.] Gary has been really struggling with his recent divorce and could likely use some company. In particular, he could use someone to just sort of let him talk about Warhammer miniatures, which he’s really gotten into ever since Cindy left him. For reference, Gary is currently using Orks but he’s Skaven-curious.”

All of that other information might be pertinent and true, but it doesn’t have to be explained in the invite. Your exhausted friend receiving a friendly, “Here’s what we’re doing if you want to join us” will be a lot more likely to opt in than the same friend getting the invite burdened with overwhelmingly niche information.

Understanding what your audience has bandwidth for and trusting them to connect the dots will open up possibilities. If you assume your audience wants nothing more than to read your words, you’ve already lost them. If you don’t trust them to follow along or fill in the blanks, they’ll feel talked down to.

You might be interested in 7 ETF marketing tactics to attract investors.

3. Your word choices and sentence structures are repetitive 

Sometimes, just to get some copy on paper, you write messy. You use the word “messy” in two sentences in a row, like I just did. Don’t do that. There are so many words. Too many, really. Pick a different one. Be ruthlessly precise.

The same goes for sentence structure. SEO best practices have made many copywriters prioritize short sentences. Variety is better. You don’t want your readers to get bored, and changing up your rhythm can help keep your writing electric and unpredictable.

Back in the aughts, I attended an acting class led by legendary theatre actor Yoshi Oida. For one of the exercises, he made everyone individually enter a room, pick up a knife, and then exit the room. You were not allowed to “decorate” the performance via emoting or saying anything. You had to maintain a neutral expression. The only tool you had to tell a story was the rhythm of how you performed these actions. And that is more than enough! 

If you simply walk in the room, pick up the object and leave, that’s vague. But if you enter and then stare at the knife for a long time before slowly picking it up … and then suddenly, rapidly exiting, well, heck yeah, now we got a story! The audience starts filling in the blanks.The rhythm of the action engages the audience's imagination. When people are actively thinking about what they’re seeing, they’re invested. 

Copy works the same way.

4. You aren’t editing or iterating enough

This is a big one. When we get an idea we like, we are prone to committing when we should be iterating. Part of this is excitement. When we feel good about something, we want it to be seen and we want to be recognized for having thought of it. But ideas are not the finished product. They are a prototype, a version 0.1. The best thing you can do is get it into the hands of a few people and get useful, actionable edits. Even sitting on something for a bit and then reapproaching it in the future can be helpful. There’s a reason feature films have rough cuts and video games have early access builds. 

If you like the way your “perfect” idea works, do something completely different. Give yourself multiple angles of attack for a single piece of copy. You might have stumbled onto the best option right away, but more often than not, iterating and listing five or six options will lead to something better. Even if it doesn’t, and you come back to that original idea, the work is never wasted. It could:

  • Help you better understand what makes your first idea exceptional
  • Be repurposed as part of a different campaign or project down the road

  • Keep your mind sharp, flexible, and open to new discoveries

A core part of this is actively embracing change at any time. This will be your superpower because lots of writers, even copywriters, can feel personally attacked when they receive a note. A note is an opportunity. 

Notes sometimes come in because a client or supervisor wants something different and better, but they also sometimes come in because you are on to something and aren’t quite there yet. Don’t judge the note or assume the note is a judgement passed on you. Embrace the opportunity to iterate and try something new or edit and punch up what you have. 

Final Thoughts

There’s more to copy than most writers assume, and there are a lot of trends and bad advice out there. But you will find success if you:

  • Minimize exposition.
  • Consider your audience and the medium
  • Vary your words, sentence structures, and flow.
  • Edit and iterate at every opportunity

If you are looking for marketing and distribution support, check out VettaFi’s digital marketing services. Our experts will partner with you to create compelling content, display ads, virtual event emails, and more.

In his monthly column, CMO Views, VettaFi’s CMO Jon Fee connects with other CMOs to discuss how they drive success inside and outside their organizations, sharing perspectives on career, outlook, and motivation. For this edition, Fee sits down with Farnaz Maters of Principal Financial Group®.

The role of the chief marketing officer has evolved as companies digitally transform, embrace the power of brand, and lean into data-driven behavioral insights to drive client growth and satisfaction. No longer is the role merely “colors and fonts” or “clever copy.” Today, a CMO sits at the intersection of most functions within an enterprise, with responsibilities that span pipeline, business development, sales automation, and even community-building. As a result, successful CMOs must embrace change while remaining close to both customer and product.

Farnaz Maters has an MBA from the Wharton School and worked her way up as an analyst to an executive director at JPMorgan. In her role as VP and CMO of Principal®, Retirement and Income Solutions, she focuses on promoting the tightly hewn connection between marketing and business strategies to raise awareness of Principal’s retirement services. Centering digital- and data-driven precision in client interactions, she manages campaigns, product and segment marketing and communications, explores digital and business analytics, and produces proprietary research and thought leadership.

Farnaz Maters on Career

Jon Fee: Let’s start with the jobs and careers. What do you think the difference is between a job and a career?

Farnaz Maters: This is something I actually talk about with people who are entering the workforce. I view a job as something you’re viewing as your paycheck. You’re clocking in and then clocking out. A career is something you’re actually finding fulfillment in and enjoyment from.

I’ve been really lucky in that, since I’ve entered the workforce, I’ve been passionate about the jobs I’ve had. I get fulfillment from my work. I’m someone who’s really motivated by learning, and my career provides that personal fulfillment. The way I view it is if you’re getting fulfillment – and fulfillment can come in variety of ways – then you have found a career you invest in it, versus a job that’s more transactional.

Fee: That’s an excellent answer and makes a lot of sense. Why don’t you tell us a little bit about your first job? You said you’ve been fortunate to have, throughout your work career, jobs where you are getting fulfillment.

Maters: My first job was in retail. It was at a department store, and I was the holiday help. I was the person behind the counter providing the department store’s free service of packaging customers’ holiday gifts. All day, I was putting items in boxes, gift wrapping them beautifully, and adding bows.

Finding the Joy in Every Job

Fee: How about the first one that felt like the career? Or was there actually the fulfillment in even that initial holiday retail job?

Maters: Even with that, it’s joyful, right? It’s the holiday season! People are generally happy. I acquired the skill set of learning how to beautifully wrap a gift. I’ve been able to lean on that skill. So I don’t shy away or dread having to gift-wrap things when it comes to birthdays or holidays.

When I was in college, I really thought I wanted to go into law. So I took the LSAT and completed all of my law school applications. Being the nerd that I am, I even decided to go through the interview process just to see what it was like and to practice for when companies come on campus.

I went through the process of applying to law school and applying for jobs at the same time and I got a job offer at JPMorgan. It was a two-year rotational program at the bank — this is before all those mergers. I knew nothing about asset management, banking, or financial services, but it sounded interesting. I thought, “My LSAT scores are going to still be good, my applications and my essays, everything is still going to be good. So I’m going to do this two-year thing. Then I’m going to go back and go to law school because I’ve done all the work and heavy lifting to prepare.”

And then I started at JPMorgan. I was a finance major, but I did accounting internships. I didn’t really have a good understanding of all the roles, all the things you do in financial services. My second rotation was in asset management, and I just fell in love. I loved everything about it. That spurred my passion and I think really started my career in financial services.

Fee: That’s a neat story and it has me wondering — what was your first job in marketing specifically?

Maters: I didn’t move into marketing until midway in my career. After the rotational program, I went into the sales organization as a sales associate doing support work. I then progressed to having my own territory, and then into being a sales leader. Along the way, I decided to go to business school.

When I was in school, because I’d already had my degree in finance, I was like, “I’m just going to take classes and look for experiences that are really intellectually stimulating and interesting.” I gravitated towards all the marketing classes, and I ended up fulfilling my concentration for my MBA in marketing strategy.

So, I get my MBA while I’m working and I’m trying to figure out the next step in my career. I’m networking, seeking input from key mentors that I really respect. One suggested making the shift into marketing. They thought my experience with clients and understanding the products would really add a lot of value to the marketing organization.

It was a really scary thought for me. For years, having revenue tied to my name and to my function, to then moving into this nebulous area. But you know what? I made the move, and I was surrounded by some really exceptional marketers — true marketers that had come from CPG and from branding agencies.

I rolled up my sleeves and was a practical student in acquiring some of those marketing skills I didn’t get to practice with my MBA or have exposure to as a salesperson or sales leader.

Changes in Marketing

Fee: How has marketing changed since you first entered the field midway in your career? How would you define it as a CMO today?

Maters: In financial services, we’ve been behind in our definition of marketing versus other industries. But I think over the last five to 10 years, financial services organizations have realized the true power of marketing and a new way to define it. They now better understand the value it can add. Early in my career, and even when I initially made my shift into marketing, it was viewed as sales support. One of the things that was really interesting and innovative when I made the shift into marketing was that the organization believed in the true power of marketing. They were bringing in key talent across digital branding, activation, and social. So there’s an influx of really talented people coming from CPG and other industries to elevate that marketing function and to deliver the value that marketing should be delivering to the business.

I’m really lucky that I’ve been part of organizations that don’t have a narrow view of what marketing is. They truly believe in the power of it as a growth driver. It’s integrated in everything we’re doing. It’s not a different part of the business. Marketing is the business.

Pets and Pet Peeves

Fee: I love that answer. Marketing is the business — you are absolutely right. The next section is my pets and pet peeves section. To kick that off, let’s talk pets. Do you have any?

Maters: I don’t have any pets. I have never been successful in keeping a plant alive. So I’ve never ventured into pets. With half my career being in sales, I traveled so much that I’m only responsible for keeping myself and my son alive. It’s just not something that my husband and I have ventured into — the pets or plants world. There are no plants inside our house.

Fee: Totally makes sense. Surely you have cultivated some pet peeves though?

Maters: Whenever I’ve moved into a new team, working with new people, I really try to outline some of those pet peeves so I’m transparent. It helps interactions go a little bit smoother. One of them is meeting culture.

Fee: Oh, absolutely!

Maters: For so many of us, our calendars are just jammed with meetings! And I really push back and encourage my team to do the same. If you’re in a meeting, and you don’t know what your role is or what you’re contributing and there’s nothing specific you’re supposed to be taking away, I’m not sure you should be in that meeting.

The other tactic I use to gauge if I should be in the meeting is if I’m multitasking. If I am, it’s either a really bad meeting or it’s not a meeting that’s important enough for me to be attending. Or it’s a disorganized meeting.

I have a lot of pet peeves around meeting culture. One of our most scarce resources is time. I want to be stingy with my time. I ask people to have the agenda and get me the materials before the meeting. If I look and there’s not an agenda or materials, I cancel the meeting, because the onus is on me to come prepared. I need to have looked at the agenda, I need to have looked at the materials, so when we get into the meeting, we actually have the discussion points and we make the decisions we need to make.

A lot of my pet peeves are around being prepared for meetings — how you show up, and what the expectations are.

More Meeting Culture Pet Peeves

Fee: You’re speaking to my heart here. Sometimes I’m in a meeting and I look at all the people and I started thinking, “What is everybody’s salary? What is everybody making per hour? How much is it costing the company for this meeting to happen?”

Maters: Yes! I think the other thing about meeting culture is herds. Do you really need five people? Do you need three people from the same team in the meeting? If I have accountability, if I’m the person representing the group or the function, it’s my job to take information and bring it back to the group. If people are doing that, you don’t need two or three people from the same team. I’m sorry, I’m really passionate about this pet peeve. [Laughs.]

Maters on Leadership

Fee: I’m 100% with you. But it’s time to pivot to a new topic: leadership. What daily habits or weekly routines do you keep that keep you sharp as a leader and evolving as a marketer?

Maters: Especially as you expand your responsibilities, it’s easy to get distracted or pulled into a lot of different directions. For me, before I come into work (on my drive in or in my preparation to start the work), I have my top one or two things I have to get done that day. It’s not 10. Ten would be amazing. But I know that if I really focus my energy and say, “This is the one thing that has got to get done today,” or “These two things are essential,” it helps me be more effective. I try not to do more than two.

Looking at the other part of the question, well before COVID, I had seven direct reports. Out of the seven, only one of them was in the same location as me. Also, only 40% of my team was in the same location. Sixty percent were either remote in a work-from-home situation or they were in a satellite office.

So one of the things I started doing was casual coffees. There wasn’t actually coffee, it was virtual. Again, this is well before COVID. It brought my team together in a more casual setting. It breaks up your day. You can engage and interact with people and build more of a community and a team dynamic. Especially as you get larger teams that you’re responsible for, it’s harder to make those personal connections. It’s something I’ve done for the last six years. I get a lot of fulfillment out of it.

In those meetings, we talk about questions people have for me about changes coming in the organization strategy. But mostly it’s fun, uplifting topics. When it comes to the team, there are only so many people you interact with on a daily basis. It has allowed me to be better connected with my team. And it’s allowed them to make connections outside of the people they work with on a daily basis.

Maters on Mentoring

Fee: I love that. I think that’s terrific. Mentoring in marketing is particularly unique and challenging because this is a rapidly evolving discipline. Who helped you get where you are today? And do you have someone you’re mentoring?

Maters:  Yes. And I think, for me, the most critical period of mentoring was when I made the career shift and moved into marketing. I had some of the technical learning, some of the strategy work that I was able to do as part of the MBA. But I didn’t have that hands-on practical experience.

I came with knowledge about the customer, knowledge about the business and the products, and peripheral knowledge of marketing. I was paired with two people when I first started in marketing. One came from the agency/branding world, and one came from a digital activation world. They didn’t have the client or the business background, they were true marketers. The three of us formed a team and tackled big initiatives while relying on each of our strengths. To this day, I credit the two of them with the amount of knowledge I was able to acquire from mentorship. They just had expertise and knowledge that I didn’t have. I had knowledge and expertise they didn’t have. It was it was an amazing way to do that, and I’ve tried to replicate that as I’ve built teams. You acquire talent to augment the knowledge and experiences of your team. Having the ability to pair people, to lean into their areas of expertise, and to upskill people is really foundational to evolving the marketing organization.

Fee: I really love that, because with this question, we traditionally hear a lot about a more classic dynamic of somebody in a higher position. I think peer-to-peer learning is probably something that happens in every field all the time. One of my early jobs was as a server, and I learned how to be a server from the other servers, not from that manager at the shop.

Maters: I think an element of it is being open and vulnerable. To know what you don’t know and being open to leaning into people who have that expertise, because that’s the way you’re going to learn.

Continuous Improvement

Fee: Totally makes sense. Terrific answer. Up next, let’s talk about digital transformation. How do you define digital transformation without using the word “digital” or “transformation?”

Maters: I have a way I describe it – it’s continuous improvement.

Because “digital transformation” makes it seem like you’re transforming, and then you’re done, right? To me, it’s about continuous evolution and enhancement.

As organizations, there are things we need to modernize. We need to leverage new technology and new ways of working. But once that initiative is done, you can’t check the box and say, “OK, we’ve transformed.”

I think if you treat it that way, you wake up and you’ve got another big transformation to do. I think it’s a shift in mindset to continuous improvement. You have to be acquiring the new technology, the new processes, the new ways of working so you’re making incremental investments throughout the way. Realizing those steady benefits versus another big initiative is critical. I’m not discounting that you need some of those big initiatives from time to time. But I am a big proponent of shifting that mindset so it’s not some behemoth digital transformation.

Innovation in Marketing and Technology

Fee: Super interesting! What is something that nobody’s thinking about in terms of digital transformation, but that you’re keenly aware of?

Maters: I don’t think it’s about that. I’m focused on what’s going to have the impact on the business and how you’re going to operationalize it, so it’s woven into your procedures, how you’re actually operating. To me, there are a lot of things that are innovative and exciting happening in marketing and in technology. But it’s important to have line of sight and know how it’s going to impact you today or in the future. Being practical about what’s going to actually move the needle for your organization versus getting distracted by some of the shiny new tools or the things creating buzz.

I’ve seen a lot of work put into data, AI, and machine learning. There’s a lot of innovation being done in those spaces, and it’s super exciting. But how much of it is actually getting integrated? You do all this work, you develop a model. But is that model being woven into and changing your business process? Is it changing the way you do your activation?

For me, it’s about making sure you understand the new trends, the new technology, and the innovations happening in the industry and in peripheral industries. But thinking about and focusing the organization on what’s going to have the biggest impact and having confidence it’s going to actually get operationalized is key.

The Crystal Ball

Fee: This all makes a lot of sense. Let’s look into the crystal ball now. Tell me about your predictions for marketing and marketers. What’s coming next, and how do we prepare?

Maters: I think about what’s happening from a regulation perspective in the standards around privacy and data. I think it’s going to be really important in our industry (and because we’re a global organization), to address customer expectations about their data and how it’s used from a marketing and targeting perspective.

The second part of this is data utilization. At Principal, we’ve been the beneficiary of a lot of innovation around data that helps us better target and drive engagement. I think that’s going to continue. I always look at CPG and what they’re doing in terms of evolution and the tactics they’re using. We’re a little bit slower in financial services. I think we’ve got a lot of leeway in taking some of the marketing best practices from outside our industry, such as targeting and data utilization.

Then I think a third one is generative AI, and what it’s able to do. I think if you’ve played around with the technology, it helps with your starting point. Then you can really elevate it with the talent and expertise on your team. AI will be able to automate some of the tasks that are a little bit more mundane or focused on the earlier part of the marketing process.

Parting Gift

Fee: Thank you so much for your time. One last question. Or, I suppose, offering. I like to have people leave a parting gift for the readers. Can you share with us an album, book, movie, TV series, or other creative work that brings you joy right now? And what is it about this creative work that fires you up?

Maters I’m going to give you two answers. I always joke with people that if you look at my Netflix history you would think that I’m a teenager or a 35-year-old male. I go towards the cheese of a teenager, or the sports of a 35-year-old male.

One of the things that I’ve loved is Drive to Survive, the Formula One documentary. I actually wake up at early hours to watch live Formula One races now! On a nightly basis, I Google “Formula One News” because I’m really invested in it. I love the sports documentary show aspect of it, but now I’m into the sport as well. The reason I love it is the precision, the craft of what they’re doing. The milliseconds matter and everything’s got to go right. How they work as a team, the competitive nature of it — all of that is really exciting to me and I love every aspect of it.

I’ll switch gears. The other thing I’m really into was the Barbie movie. In the middle of the movie, I actually ordered the “Kenough” sweatshirt. If you know me, I wear white, black, and navy … and that’s it. This sweatshirt is neon colors and it’s fluffy. In the middle of the movie, I took out my phone and ordered it.

I’m waiting for someone to dissect, from a marketing standpoint, the feat that the Barbie movie accomplished. It is absolutely amazing. I’m in awe of the marketers behind it, the integration that they’ve accomplished. It’s amazing.

Insurance products and plan administrative services provided through Principal Life Insurance Company®, a member of the Principal Financial Group®, Des Moines, IA 50392.

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This article was originally published on ETF Trends on November 8th, 2023.

In this edition, VettaFi CMO Jon Fee sits down with Vanilla CMO Jim Sinai.

The role of the chief marketing officer (CMO) has evolved as companies digitally transform, embrace the power of brand, and lean into data-driven behavioral insights to drive client growth and satisfaction. No longer is the role merely “colors and fonts” or “clever copy.” Today, a CMO sits at the intersection of most functions within an enterprise, with responsibilities that span pipe, business development, sales automation, and even community-building. As a result, successful CMOs must embrace change while remaining close to both customer and product. 

Jim Sinai is a seasoned cloud executive and experienced marketer, with a background in sales and business development. He is passionate about new technology, telling the story, and helping make complex software easy to understand.

Jim Sinai on Jobs & Careers

Jon Fee: What do you think is the difference between a job and a career? 

Jim Sinai: A job is what you do in a moment or period. A career is the portfolio of jobs that defines your identity. I started in software in customer service, moved into sales, and have spent the last decade in marketing. So I think I will probably look at my career as a software executive more than the job or role I held. I also am a big believer that we live our lives in chapters. Chapter one was service and sales. Chapter two was marketing. I’m curious what chapter three will be.

Fee: Well, tell us a bit about the prelude to chapter one! What was your first job?

Sinai: My first job in high school and summers in college was working on a construction job site as a laborer. My first job out of college was in a call center at Bloomberg. While these may seem very different, there was a common theme – both roles were manic about customer service. My job every day in construction was to make sure the homeowner/client’s house was dust-free and they felt that the construction project was minimally disruptive. And at Bloomberg, it was grounded in what customer service at scale needs to look like.

Fee: That’s really interesting! What was your first job in marketing and what’s something you learned from an earlier job you had outside of marketing that impacts your approach to marketing?  

Sinai: My first marketing role was as a product marketing manager on a small business unit at Salesforce in 2011. There are two things that really made me successful in product marketing. The first was that I came from sales so I always looked at my marketing through the lens of “would i say this in a customer meeting?” The second was that I really wanted to be a product manager for a period. This allowed me to really lean into the product side of the role and understand how software is built. Both of these perspectives have continued to inform how I approach marketing in my role at Vanilla, where we’re reinventing the estate planning experience by building beautifully designed products that make the complex simple.

Fee: Tell me about how marketing was defined when you first entered the field vs how you as a CMO define it today?  

Sinai: Since I started in marketing, there’s been an explosion of technology and data, creating a more data driven approach to marketing. But lately, the amount of data and systems are starting to be too much for an organization to really leverage. AI is most definitely going to make managing data easier. Lately, I’m noticing a trend of the best marketing organizations returning to the power of storytelling and brand to build and maintain their differentiation. So, while the tools and channels might change, the core focus of great marketing – be something special to someone – is not going change.

Jim Sinai on Pets and Pet Peeves

Fee: Do you have pets? What about Pet Peeves? What annoys you the most in the workplace?  

Sinai: Three kids keep us plenty busy so we are going to wait a beat before adding a fourth “kid” to the mix. My wife is a veterinarian so she gets the rest of her dog fix at work.

But I do have a few pet peeves. I really get annoyed when someone calls a meeting and doesn’t come prepared to drive the conversation. I’m not saying you need to have a full deck, but you should be driving the conversation and making sure it’s outcome oriented. Second, I think a lot of people forget to set context for executives. We’re all busy so it’s important to start with 30 seconds of “why are we here” and “what decision do we need to make?”

Leadership and Work Habits

Fee: What’s the one thing you can point to (a book, an experience, a person) that has played the greatest role in shaping your leadership style?

Sinai: Early on in my career I learned about the Nordstrom organization chart, which is upside-down. It’s the CEO’s job to support the management team and the manager’s job to support the associates in the store. That has always resonated with me and how I approach leadership. The marketer in me loves the book “The Power of Moments” by Chip and Dan Heath. They point out how to create lasting impressions with people by wow-ing them when their brain is primed to take inputs

Digital Transformation

Fee: One of my favorite questions to ask other CMOs – define digital transformation without using the word digital or transformation.  

Sinai: Is it cheating if you use a foreign word? Kaizen is the Japanese word or term for continuous improvement. Most every organization practices kaizen to some degree, albeit some slower than others. And continuously improving is about adopting both proven and innovative practices from other industries to better serve your customers and employees. As long as everyone can agree the status quo isn’t sufficient, we’ll all continue to get better!

Giving Back

Fee: Tell me about your volunteerism and giving back to make a greater impact?  

Sinai: I love to volunteer when I can. Truth be told, it comes in waves and right now I’m in a trough, mainly due to intense family commitments. In the past I’ve spent time as a youth mentor or tutoring in schools. But right now, I’m spending time coaching young kids on the soccer and baseball field. Everytime I lean in, I remember that giving back is one of the best ways to create happiness and joy.

Careerwise, I know I always prefer to be working on a product that has an element of giving back. At Bloomberg and Salesforce, employees were measured on volunteering. At Procore, our platform was improving how folks on the jobsite worked and we delivered countless dollars and hours of free training and products to university students. And now at Vanilla, we are working on how to simplify estate planning, first for the advisor community, but ultimately to make it more accessible to everyone.

Fee: Have you ever been on the receiving end of giving, and how did it impact you? 

Sinai: Every role I’ve gotten, from admission to a school or a job offer, has come because of mentorship and network. I’m super indebted to folks who gave me time and the opportunity. So I take it as a mission to make sure to help the folks coming up find their way to their opportunities.

Looking into the Crystal Ball with Jim Sinai

Fee: Tell me about your predictions for marketing and marketers? What’s coming next? How do we prepare?

Sinai: I think we’ve seen just the tip of the iceberg on generative AI so I’m loath to predict what the future holds. One thing I can say for sure is that it’s going to be easier and easier to generate content which means that while more marketing teams can focus on creating more content, it’s going to require more work to cut through the noise. I’m also curious to see how search changes when we get to more conversational user interfaces.

Jim Sinai’s Parting Gift

Fee: Can you share with us an album, book, movie, TV series, or other creative work that brings you joy right now? What is it about this creative work that fires you up? 

Sinai: I’m in the middle of Shantaram. It’s about an Australian escaped-convict hiding in India. It’s a long read, but I’m enjoying getting a peek into a culture I know little about.

And let’s also just admit that Netflix’s Drive to Survive was the world’s best marketing stunt. I am shocked to admit I’m now an F1 fan.

To stay connected to Jim, you can follow him on LinkedIn. 

This article was originally published October 10th, 2023 on ETF Trends.

 

In this edition, VettaFi CMO Jon Fee sits down with Broadridge CMO Dipti Kachru. The role of the chief marketing officer (CMO) has evolved as companies digitally transform, embrace the power of brand, and lean into data-driven behavioral insights to drive client growth and satisfaction. No longer is the role merely “colors and fonts” or “clever copy.” Today, a CMO sits at the intersection of most functions within an enterprise. Their responsibilities span pipeline, business development, sales automation, and even community-building. As a result, successful CMOs must embrace change while remaining close to both customer and product.

Dipti Kachru has a proven record of leading multi-disciplinary marketing teams in launching new businesses, designing integrated go-to-market strategies that shape brands and deliver on sales goals, and instilling a culture of excellence, innovation, and flawless execution. Prior to Broadridge, Kachru was the CMO at J.P. Morgan Wealth Management and the affluent business at Chase. She also spent many years in asset management at J.P. Morgan and OppenheimerFunds, and is a Columbia University graduate.

Jon Fee: I like to kick things off by talking about jobs. What is your dream job? Aside from being a CMO, of course.

Dipti Kachru: Don’t ask me whether CMO of Broadridge is or is not my dream job. That’ I refuse to answer. I plead the fifth.

Fee: [Laughing] We’ll leave CMO out of it.

Kachru: You don’t have to because the reality is that being a CMO is the closest I have been to having a dream job. I love how it brings together art, science, data, and technology to solve business problems.

I think the other ingredients of any dream job for me is working with scale and complexity. I love looking at the world from different perspectives. I love building and I love problem-solving! But it’s not just about the process. At the end of the day, for me the essential ingredient of a dream job is being able to have impact – business growth, a stronger marketing function, a more fulfilled team.

Dipti Kachru On Her First Marketing Job

Fee: Awesome. What was your first job in marketing?

Kachru: My first job in marketing was working for a promotional marketing agency in India at a time when the Indian economy was opening up to global brands. This was the early days of digital where Marketing primarily entailed traditional advertising or “below-the-line” promotional and event marketing. This is where I really learnt what it meant to be a marketer – understanding the business strategy, learning how to soak in customer insight, how various channels of marketing drove different outcomes. It was an incredible training ground. We were a start-up agency and so I got to wear multiple hats from operations to strategy and worked on some of the best brand in the world helping them re-orient their marketing strategy to a vibrant market like India.

Pets and Pet Peeves

Fee: The next question is do you have any pets? What are your pet peeves?

Kachru: No pets, but I do have two kids who keep me on my toes. That said, my daughter is actively petitioning, more like harassing, us for a dog.

When it comes to pet peeves it’s usually about specific work cultures & mindsets. For e.g. work cultures that don’t embrace a growth mindset — where people think they already have all the answers – and rely too much on past performance versus being more open to outside in thinking.

The second pet peeve is selfish, self-promotional attitudes. I am really big on operating as tribe where it’s about aligning around a purpose larger than any one person’s role or agenda. We only win when we win as a team – so the egos need to have to be left at the door.

Jon Fee: Yeah, that makes a lot of sense. We’re definitely, I think, at a place in the world where it matters to have an idea of where we’re going collectively. I think that’s a really smart answer. What’s one thing you can point to – and this can be a book, it could be a person, it could be any experience you have had – that has played the greatest role in shaping your leadership style?

Kachru: I don’t know if there’s one thing. I truly believe that I’m the sum of my experiences and I continue to evolve based on those experiences.

I try to be a sponge, and learn from everything I read and listen to. I particularly enjoy podcasts featuring CMOs as you get to hear their thinking and how they are building world-class teams and cultures while strengthening the role of marketing in the business.

As for people who have influenced me, I have been lucky to work at some amazing organizations with a talent bench of leaders, especially some incredible female leaders. One of the most talented CMOs I know, who is now CEO of a wealth management business, really helped me broaden my thinking on the role of marketing beyond the traditional lines – and to see it as business strategy and growth function.

I have learned the most by seeing leaders in action. One who had a meaningful impact on me was Thasunda Duckett, currently the CEO of TIAA, who showed me the power of empathy and inclusion in galvanizing teams and rallying around a purpose.

Dipti Kachru On the Rare CMO to CEO Career Path

Jon Fee: Why do you think the CMO to CEO pivot is rarer than maybe some of the other C-suite pivots? And do you think that that is maybe a lost opportunity?

Kachru: It’s an absolute lost opportunity. The data tells you that very few CMOs end up being CEOs. CEOs tend to come from finance, business or sales. And this is because traditionally, the role of marketing was designed around brand building, storytelling, and sales enablement — they weren’t seen as a proven lever of growth. But with modern marketing and improved use and data and technology, that is changing.

B2C organizations for years have recognized marketing a growth driver. B2B is still getting there. There is growing recognition now of the CMO beyond the classical MarComm function or the customer advocate, rather a leader uniquely suited to connect product, sales, finance, technology and business strategy and orchestrate a more coordinate go-to-market to help drive growth.  I think this acknowledgment and proven track record of the modern CMO will help set them up more CEO roles.

Jon Fee: I always think it’s interesting how marketing runs through an entire organization. You can’t tell the story without knowing the character, right?

Kachru: Indeed. And by understanding the role of the character today and in the future – you can establish a vision and value proposition that can be sustained.

Digital Transformation

Jon Fee: That makes a lot of sense, and in speaking of how you get there and where the setting of this story now occurs. More than ever, it’s digital. So, we’re going to go on to the next topic, which is digital transformation. Can you define digital transformation without using the word ‘digital’ or ‘transformation.’

Kachru: For me, it’s about better serving your customers where they are, and how they want to be served. That’s the heart of it. Digital is an enabler; transformation is a necessity of evolution. But at the heart of it, it’s about meeting and ideally exceeding customer expectations.

Kachru Peers Into the Crystal Ball

Jon Fee: Makes a ton of sense to me. Let’s do the dangerous question now and dip into the crystal ball. And you will be held totally to account if you’re right or wrong here. So be ready for that, the people in the future will look back on this interview.

Kachru: [Laughs.] For context, this interview won’t be published for a few months, so I’m predicting the future from a point in the past.

Jon Fee: So what is your prediction for marketing and marketers? What’s coming next in the one to five years out range? What’s going to be the next big thing that we all must be wrapping our brains around?

Kachru: As I have mentioned in this conversation, I truly believe that the role of marketing will evolve, more universally, to be that of a growth driver. That’s my prediction. The Marketer will continue to have a growing voice at the table especially when brands and organizations are trying to find and hold on to their differentiation in a rapidly evolving marketplace.

Marketers were always recognized for their contribution to building brands, amplifying messages, and being a customer advocate. But with better access to data and analytics, marketing can prove their value – show real revenue attribution for their efforts. Similarly, our ability to orchestrate targeted digital experiences give us a greater role in driving the sales process and delivering measurable outcomes. This clarity in our contribution will unlock an appetite to invest more in marketing – which is needed especially when it comes to data and tech infrastructure. I am excited about this dynamic and this maturity in the role of the marketer as critical in driving business growth. By the way, this also means that as marketers, we need to work hard to deliver on this promise.

The Art of the Story

Jon Fee: I would love to hear your thoughts about why brands story matter and what brands do that they usually get wrong in terms of how they present their story?

Kachru: Well, that’s a loaded question. Why do brand stories matter? I think as human beings, whether you’re a B2C or B2B brand, you’re still selling to human beings. And purchase behavior isn’t just rational – emotional association with the brand often tips the scale, especially when the products are largely undifferentiated. At the end of the day, it’s about establishing a strong relationship with the customer – and this is where authentic brand stories come in. It’s how consumers understand the brand, its purpose, and its promise.

What do brands get wrong? I see two things often – One, companies get caught up in the opinions of senior leaders vs. deeply listening and incorporating the customer insight. The core elements of their brand and story are shaped by individual reactions and opinions, and the real customer insight gets lost.

The second is brands that tend to hold on to the past glory and miss the opportunity to evolve with their customers. Stories need to be authentic, but its form and distribution channel needs to change. Static brands tend to fade away and brands that deeply understand who they are but can evolve their narrative with the evolution of the landscape, I think, tend to succeed.

Parting Gift

Jon Fee: That’s a really smart answer. I like that a lot. For the final one, we’re just going to do a parting gift. Can you share with us an album, book, movie, TV series, podcast, or other creative work that brings you joy right now? And what is it about this creative work that fires you up?

Kachru: What I love about marketing is this mix of emotional and rational …art and science. And that is often reflected in what I tend to read or listen. I try and feed both sides of the brain. For me, the rational is often listening to CMO podcasts, because they offer very real insights and advice on how they approach real challenges and how they drive outcome. I find the thinking and ideas very inspiring, and it make me feel less alone in my mission.

On the art side, I absolutely love strong storytelling and it usually has nothing to do with business or marketing. For example, I love the Moth podcast. I love texture the Moth brings out — the humanity, the heart, the joy, the heartbreak – all the things that make us human.  There’s been plenty of times on my commute that I’ve shed a tear while listening or smiled purely because of a story someone’s narrated. I have no idea who this person is, where this person comes from, but there’s a connection that comes through and it reminds me of the power of words. It reminds me of the value of storytelling, and the privilege we have as marketers to tell powerful stories for our brands.

This article was originally published August 9th, 2023 on ETF Trends.

In this edition, VettaFi CMO Jon Fee sits down with Vanguard’s Sid Ratna. The role of the chief marketing officer (CMO) has evolved as companies digitally transform, embrace the power of brand, and lean into data-driven behavioral insights to drive client growth and satisfaction. No longer is the role merely “colors and fonts” or “clever copy.” Today, a CMO sits at the intersection of most functions within an enterprise, with responsibilities that span pipe, business development, sales automation, and even community-building. As a result, successful CMOs must embrace change while remaining close to both customer and product.

Sid Ratna is a ‘Full-stack’ CMO of $3 trillion intermediary business. He leads a talented, fully agile, diverse team of ~140 marketers responsible for E2E marketing strategy + execution. His work is in service of what he calls the 3 C’s: delight the Client, empower the Crew, and grow the Company.

Sid Ratna on Jobs and Careers

Jon Fee: What is the difference between a job and a career?

Sid Ratna: For me, a job is where someone else has told you to do something and drawn a box for you. They have defined what success is. You, in turn, have to fill up that box and operate within that box. For many of us, including myself, a job was really a way to pay bills and prevent my parents from having to subsidize my life.

A career is where you determine what success is. What you want your story, your narrative to be. You’re investing in yourself over decades. In your career you think about other people more. Your impact and value to them. What’s your purpose? In career you’re thinking bigger than yourself and and your paycheck. If you are doing it right you are thinking beyond your box, and hopefully spending as much time out of the box as you are inside it. And hopefully thinking a lot about whether your legacy persists in helping clients and crew long after your presence has moved on.

Fee: That’s an excellent answer. What was your first job?

Ratna: My first job — I really wanted to work in a bank, but I had graduated into a crisis. I had actually skipped my first year of college, I was doing sophomore year in Canada. I didn’t even grow up in Canada, I grew up in Thailand. I was just 17 years old and I didn’t really nail my first year of school with great GPA, great academics. So while I wanted to work in the bank, I wasn’t in that top 10%.

I actually got a job on the phones, reviewing loan applications and credit card applications, asking applicants deeply personal questions about their income and debt. It was formative. I learned a lot of gratitude for what it is to be on the front line, and got into strategy and analytics from there.

Living the Dream Job

Fee: The counterpoint question to that is what is your dream job?

Ratna: In many ways, I am living my dream job with Vanguard and what I do now. That might sound hokey, but it is actually just the way I approach the job, the mindset, and gratitude for all the things that I get to do.

Let’s, let’s put aside the word a job for a second and say, what are the dream things that you would like to be able to do, and get paid for it? For me, those elements are: be able to impact a large group of people — check. Build something that’s beautiful that’s born out of your vision and the team around you that you recruit and select — check. Do something delightful for the client or do something delightful for society and do it at a place that is mission-driven and purpose-driven. So, check, check, check, check!

But also work at a place where you never sacrifice personal integrity or compromise personal beliefs. I love being a family man, a husband and an involved father, and work lets me do that — check. Today, I feel like I am doing a ‘dream job’ because go to bed happy and feeling very fulfilled.

I probably have a ‘Chapter 2 Dream Job”. Once I’ve put my kids through college, I really, really would love to do something — I haven’t defined this yet –where I get to teach kids who haven’t had the same access to opportunities and networks that are essential in having the types of careers they aspire to and deserve.

There are a lot of things people take for granted: how to wear a tie, what suit to wear, how do you interview? How to shake hands? How do you write a resume? These are things some of the kids in America don’t have access to. I’ve had a great ride for 22 years, I’d love to just impart a lot of that back into maybe just looking for that access to information. I don’t know how that takes shape, but I would love to do that.

Fee: Awesome. That’s a that’s a great answer.

Ratna: In many ways it’s just paying it back or paying it forward. I’ve made so many unintentional blunders in my life, including showing up for my first real job interview wearing what, at that time, I thought was a really cool pink tie and a pink shirt, to a very conservative place. You have to understand it was ultra conservative. [Laughs] I just didn’t know that.

People along the way taught me the importance of first impressions. And, yes, you should always be creative and bring your authentic self to work, but that can take many different versions.

Ratna’s Unique Entrance Into the World of Marketing

Fee: So how did you get into the marketing world?

Ratna: I haven’t been a marketer for as long as people think. My career arc was almost always strategy, data, and business development. You can call it M&A, you can call it strategic partnerships.

I love growing businesses and I love using data and financial acumen to build something of beautiful value for the client and for the company. At that time, JP Morgan Asset Management was looking to do a data and digital transformation of marketing. I joined on their data side, and really wasn’t looking at marketing. I was just looking at data and effective use of digital assets and marketing investment to drive outcomes.

I just saw sales and marketing as channels around the client. So, I started just building a more client centric understanding of who, say, Jon Fee was, as an individual — not through the lens of marketing or a digital website or email. I didn’t really care. I just cared about Jon and what was Jon telling my company in regards to what he liked and didn’t like. And by virtue of that, when the US CMO left, the global CMO at the time offered me the opportunity.

So I became the CMO as well as head of analytics.

Learning From the Past

Fee: Excellent. It’s a great story. What’s something you learned from an earlier job that you had outside of marketing that impacts your abilities as a marketer or your approach to your current job?

Ratna: Yeah, so remember how I said I started on the phones? Two years in, some very wonderful people at Bank of America took a chance on me and saw some things in me that they believed in. I joined their leadership development program, and it was just 10 people in this program. In that program, they made you do every single job: sweeping the floors after a party, collecting on people who maybe applied for a credit card but never had the financial education to balance debt and an income properly, customer service like selling credit cards at a NASCAR statement, which is which is not as easy as it sounds and it doesn’t even sound that easy.

From that program, I learned two things. One is the importance of leading by example. You need to be able to look at your team in the eye. There are a lot of things that I am asking of you, and it matters that I have either done them myself or would be willing to do them when times get tough. That just gets you a lot of credibility when you’re leading teams of people or large teams of people. When I’ve done the job, the people I’m leading understand that I’ve walked a mile in their shoes.

The second thing that I learned from that job is empathy is very, very necessary. Leading and managing is a privilege, it’s not a job, you didn’t earn it, you’re not entitled to it, you have to earn it on a daily basis. It is important, when you are sitting across from someone having a business conversation, to understand the person across there is a human. They brought a lot of their personal situation to work that day and at the end of the day, they’ll go back to that personal situation. You have to understand that that’s who they are. They’ve got dreams, aspirations, concerns, a lot of things.

That lesson has become more and more important to me, the larger the teams that I lead and the broader the spectrum of people I’ve led from very early career to later in their career. You have to think of the human first, even before you get to the business sort of side of things.

Pet Peeves

Fee: That’s an excellent answer. Do you have any pet peeves?

Ratna: I’d start with my own patience is my own pet peeve. I wish I was a more patient man.

I’ll tell you what I enjoy and then you can interpret that on the other side of that coin in terms of maybe what I don’t love as much. I like positive people, especially when I manage teams. I especially get a lot of energy from people who see opportunity, they identify problems, they’ve got a solution going forward. They know what they need from you to solve the problem and they ask for it. I love that.

I love and I get a lot of energy from positive people. We talked about a career, which is more than just the sum of the parts, right? It’s the narrative. It’s the team culture. It’s the camaraderie you build with your team, with your directs, and then even with your boss. And so, because I love that so much… have you ever sat across from someone where it feels so apparent that it’s a chore for them to even be there? The first time, you get it. The second time, you’re like, okay, fine. But by the fifth time, you’re asking am I  doing something wrong, or do you just not want to be here? How do I make this a more positive experience for everyone involved? That’s something that just sort of drains my energy and I’m a big believer in bringing your energy to work.

I’m very grateful to work in the industry that I get to work in, the one that you work in. And what I really appreciate are the people – I call them volatility eaters. There’s always going to be times where things go up, things go down. There’s a sense of inspiration you get from people who just manage the volatility and have this calmness about them to say, “we’ve seen this before. We’ll get through this.”

I try and do this with my team. I really appreciate that and maybe not so much the volatility amplifiers.

Living Through Your Career

Fee: Totally makes sense to me. What daily habits or weekly routines do you have that keep you sharp as a leader or evolving as a marketer?

Ratna: I’m constantly thinking of myself as a client, as the customer. I wake up and go to sleep with that mindset. So, it’s like if you asked me again, “what’s difference between career and a job?” Job is you put your job hat on, take it off. A career is lived through.

So, one thing that keeps me sharp is I’m constantly thinking about my client experience, what I like about it, and what could be better.

Then, on the flip side of the coin, how’s that impacting the hundreds and thousands of clients of mine? Benchmarking! I love, love, love looking at other industries and downloading apps from things that I may not necessarily be that interested in. But I downloaded just to learn how they are talking to their clients and teasing out what can I learn from them.

Those two things make sure that I never get complacent or stale. I’m always participating in a relevant conversation, I’m learning from in the industry but also outside the industry.

Then the last thing is, honestly, the people who keep me not complacent and mentally young, the teams that I hire. I take big bets on people with high potential. I’m probably more willing to lean on potential versus proof. I don’t hire Jon Fee because he’s already proven himself to be a great marketer. You don’t get any alpha for that, there’s no prize. The betting on potential though – I’m a big believer in that. That’s real leadership. Courage. A bet on very talented directs. Sarah Alexander was one of them. Their natural curiosity and their runway, and the fact that they care so much and get better keeps me learning from them.

Ratna on Being Inclusive

Fee: Yeah, that makes a lot of sense. And Sarah is definitely someone who will succeed no matter what role you put her in! Let’s pivot over to volunteerism. How do you give back?

Ratna: I forget what it is called, but there’s this diagram of how, when you start, a job becomes a vocation. But ultimately, you end up on a purpose and mission. Early on in your trajectory, it’s about timing. It’s mostly about what you need. You need to be able to pay your bills, pay rent – that’s a job. When you get good at it, it becomes a vocation. Hopefully by the time you’re done, what you do intersects with what the world needs and it becomes closer to a mission and a purpose.

So a lot of what I do today is very active. I care passionately about the DEI front, and being able to help people tell their stories and to understand other people’s stories because I love this country.

I grew up in Bangkok, Thailand, and my earliest memories of some of the nicest most inclusive people were these amazing people called Americans. And one was a Hawaiian teacher of Hawaiian descent. One was white, and one was black. But they were all called Americans. And they talk to each other like Americans.

It was just so inclusive before I even knew what the word inclusive was. They were the first to make me feel very included. So, age eight or nine, I told myself, “I’m going to live in America someday.” I just knew wanted to be around these people.

I’m here and I love being part of this country. But there’s still a lot of work to be done. So, while this country has been very good to me, I now need to pay it forward and make this country feel more inclusive for people who are trying to participate and have that representation.

I’m very active on that on DEI front at Vanguard and then second is just mentorship within the company and outside the company. Again, I think I’ve had the privilege of having people teach me a lot of things where I made unintentional mistakes, or lift me up when I needed it. I remember a lot of those lessons and I still have that passion, that fire to lift someone else up. Similarly, I want to help someone who’s got all the acumen, all the energy, all the drive, all the attitude and just needs a little help pointing them in the right direction. So, I do that as well.

I’m a very present dad at home right now — I probably will get even more involved with the nonprofit or nonprofit board.

Digital Transformation

Fee: Excellent. I love that answer. I appreciate that you’re doing that work and living that mission. Let’s chat about digital transformation. Without using the words “digital” or “transformation,” define what that term means.

Ratna: Yeah, I think that’s a great question… leaders and marketers should be asked that question more often. Even that term is such an inside-out term. It’s speaking from the lens of the company, the channel, what the company is trying to do. Really, the way I think about my job is how do you show up for the client when they need you? How do you meet the client, where they are, with what they need when they need it, and do it in a delightful way so they actually appreciate you reaching out to them?

That’s all digital transformation is. We call it a “transformation” because, well, a lot of our old ways of doing things need a rethink, because our clients are now either in different places or talking to us in different ways or in need of different things. That’s really all a digital transformation is. But at the end of the day, all it’s always been about is the client or the customer.

Fee: That’s a great answer. What’s something nobody’s thinking about in terms of digital transformation, but that you’re keenly honed in on?

Ratna: I don’t know that no one is thinking about them. I’m sure there are very talented leaders and marketers who are also thinking the same way.

The first thing is that while the word transformation is described as digital, there is a huge human element to this. On the work side. So, the digital transformation done correctly involves a lot of change management, a lot of upskilling, rescaling, a lot of reassurance.

People who lead large teams may have been doing a thing a certain way, and you cannot ever let your transformation capabilities be asymmetric or overtake your change management strategy and your thoughtful human approach.

Sometimes the appetite for doing cool things makes leaders move too fast without bringing the people along or having a thoughtful human capital strategy. It’s not going to work. And it’s also just not very humane.

So, there’s a whole human or humane side for digital transformation at large companies that you really have to be thoughtful about.

Talking about generative AI, there are a lot of implications for that. And as much as half of my brain wants to lean in, because this is the kind of thing that I find super attractive and it has great client potential, my conscience is thinking about, how do I do it in the right way, with people involved?

So that’s one. The second one, and this is going to sound a little meta or a little esoteric, but I increasingly think about that most fiduciary or social responsibility marketers need to play when it comes to marketing and advertising more and more.

Here’s what I mean. You talked a little bit about digital transformation, right? We have to consider that four or five decades ago information was largely symmetric and followed the normal distribution, meaning, you went and got your news. Hardcopy. Wall Street Journal, New York Times, the Economist. We all shared the same tomes of information and it was built on a normally distributed curve. There was no personalization, there was no streaming of news, there was no hashtags of interests. Everyone had the same set of facts, whether they were right or wrong, they had a consistent set of facts. This consistent place that had to, by virtue of large publication, normally distribute interests and information.

That has changed. Now you can do hyper-personalization, you can reinforce notions, in a way that humans are maybe thinking, “well, here’s all the information I have, I’m going to assume that’s normally distributed information. That’s what the world is.” But all I’m doing is reinforcing a loop, getting you further and further polarized from a set of facts. And so, with great digital power comes great digital responsibility.

It’s not about just selling things, you have to also balance it out. You have a responsibility to balance it out. The right intent, what is right for the client? What is right for the customer? What’s right for the audience, what’s right for the reader? And so that responsibility of marketing is something that I think about a lot, especially as the world gets more digital, and personal.

Fee: I think that’s something that we should all very much be thinking about. Terrific answer.

Ratna: It is becoming easier as a marketer, you now have more in your arsenal. The goal isn’t necessarily just to sell, you have to have to be responsible.

Looking Into the Crystal Ball

Fee: What’s a headline you expect to read in the next five years?

Ratna: I cannot yet give you something, the concrete headlines. But my bet is – and you’re already seeing it, headlines around what it means to be to be a productive member of society.

I think technology has this long build and then it gets exponentially more powerful.  A lot of tasks that we are asking the human brain – which is this beautiful, ultra-creative, cognitive machine – to do are still highly rote and monotonous. We’re paying people to do the same thing they’ve already done.

And just with how far generative AI has come, how far our remote and virtual capabilities have come right, where robotics has come, how far data has come – data models and cognition and decision-making engines.

The confluence of that is going to be an exponential multiplication of those capabilities, we’re going to see the rote things taken out of society. Which is scary, don’t get me wrong. But also, a lot of headlines that I’m hoping to see are also highly uplifting ones because it places a premium on creativity, like true creativity, true original thought. You asked about dream jobs. I’m hoping to see a rise of dream jobs in the future.

A Parting Gift From Ratna

Fee: I love that. Before I let you go, can you share with us an album, book, movie, TV show, or other creative work that’s bringing you joy right now?

Ratna: I grew up loving all of Sherlock Holmes, like every single story I’ve read. I just think Doyle was actually a very expert writer. His language and construction of the English sentence is expert. The topic was very interesting, obviously. But it’s more than just about detectives, I love the way Doyle wrote.

Obviously, its very sad that there are no more stories to be had, except I went to the library the other day. I saw a book titled “Mycroft and Holmes”, written by Kareem Abdul Jabbar. And he’s actually a brilliant author. He’s also a brilliant writer, and a civil rights activist. He’s just a brilliant man. He contributes to the New York Times and New Yorker and is just very, very thoughtful. I just love seeing this side of him. So, I’m enjoying the book, I’m enjoying the protagonist, but I especially enjoy the story behind person writing this book and how he’s had so many chapters of his life. He’s redefined the concept of a job or career, where he can be a basketball star, a civil rights activist, and now an author.

Fee: That’s brilliant. Thank you so much.

This article was originally published July 12th, 2023 on ETF Trends.

In this edition, VettaFi CMO Jon Fee sits down with Cboe Global Markets SVP, CMO Megan Goett. The role of the chief marketing office (CMO) has evolved as companies digitally transform, embrace the power of brand, and lean into data-driven behavioral insights to drive client growth and satisfaction. No longer is the role merely “colors and fonts” or “clever copy.” Today, a CMO sits at the intersection of most functions within an enterprise, with responsibilities that span pipe, business development, sales automation, and even community-building. As a result, successful CMOs must embrace change while remaining close to both customer and product. 

Prior to Cboe Global, Megan worked as the Managing Director – Global Head of Digital, DTC, Branding & Design for Morgan Stanley. She also was the Executive Director, Global Head of Mobile & Sales Enablement at J.P. Morgan Asset Management. She got her masters degree at NYU.

Megan Goett on the Differences Between Jobs and Careers

Jon Fee: What is the difference between a job and a career?

Megan Goett: A job, to me, is a short-term opportunity focused on earning money through a paycheck. In contrast, a career is a longer path that prioritizes growth and development aligned with your interests, goals, and values.

I view jobs as an avenue for figuring out one’s career path. Throughout my own career journey, I have held many jobs that helped me define what I wanted in my career. By honing in on what I enjoy and what piques my interest, I was able to identify and pursue my chosen profession.

Fee: That makes a ton of sense. What was your first job?

Goett: My first official job was during high school when I worked at The Gap. While there, I learned the basics of working retail such as how to fold clothes and operate the cash register. As a “Keymaster,” I even had the authority to process refunds – it felt like a big promotion. This experience marked my introduction into what I consider a real job; one where I had a manager who held me accountable and provided performance reviews.

The Master Builder

Fee: With all that in mind, what is your dream job?

Goett: As a highly creative person, I enjoy engaging in hands-on activities such as crafting and building. If I could choose a “purely fun” profession, I would love to become a Lego Master Builder – yes, you heard that right!

Despite the humorous nature of this aspiration, it is one that truly resonates with me. In fact, my love for Legos is so strong that I often purchase them just so that I can build alongside my children. It brings me great joy to explore new designs and create unique structures.

I even take inspiration from the show “Master Builder,” which my kids affectionately refer to me as due to my skill level and enthusiasm for the craft.

Fee: This begs the bonus question, what’s your favorite Lego set?

Goett: [Laughs] While many people are into Star Wars and iconic vehicles like the Millennium Falcon, I find my passion lies with historic buildings. There’s something about these structures that draws me in and captivates my interest.

When it comes to building with Legos alongside my children, we often focus on creating miniature cityscapes. From barbershops to corner delis to apartment complexes, we enjoy constructing a variety of buildings that can be combined to form a bustling metropolis.

One of our favorite sets features a school building complete with everything from the cafeteria to the art room – it’s incredibly detailed and provides endless creative opportunities for us all.

Marketing and Mentorship

Fee: How did you get into the marketing world?

Goett: At the start of my career, I worked for an investment bank that underwent a significant headcount reduction in 2001. Fortunately, I was part of a team that had been performing well and three managing partners spun off to establish their own boutique firm – which I decided to join.

Transitioning from a big corporation to a smaller one presented new challenges as we no longer had access to internal teams who could handle tasks such as PowerPoint creation or marketing efforts. As a result, I found myself working on everything from branding strategy to website development alongside our small team based out of New Jersey.

Despite initially feeling overwhelmed by these added responsibilities, it eventually became clear that this work truly excited me and sparked an unexpected passion for marketing. Through this experience building our brand from scratch, I discovered newfound enthusiasm for creating unique experiences through creative strategies and digital media. From there on out, my career path shifted towards marketing roles where I could continue exploring this passion in greater depth.

Fee: Let’s talk about mentoring. Marketing is a is a unique area for mentoring because the space evolves very quickly. Is there a mentor who got you where you are today? Your story makes me think that you probably figured a lot out yourself, but was there a mentor in there anywhere?

Goett:I previously worked at Morgan Stanley where I had the privilege of hearing Carla Harris speak on several occasions. As a senior woman in the firm, she is well-known for her client advisory work and for also being an opera singer – making her background quite unique.

One topic that Harris often spoke about was mentorship, which really resonated with me. While having mentors can be helpful, it’s having a sponsor that can truly take your career to the next level according to her theory.

Throughout my own career journey, I’ve been fortunate enough to have both mentors and sponsors who provided valuable advice and feedback. However, it was those individuals who truly believed in me and went above-and-beyond by advocating for my abilities; these were my sponsors.

Interestingly enough, both of my primary sponsors directly managed me while working at JP Morgan prior to joining Morgan Stanley. They recognized my potential and pushed me out of my comfort zone into new roles that allowed me to evolve as an employee while testing myself along the way. Without their support, I wouldn’t be where I am today so owe them a great deal of gratitude!

How Megan Goett Uses Customer Service

Fee: That makes a ton of sense. What’s something you learned from an earlier job you had outside of a marketing job that impacts your abilities as a marketer or how you approach your current role?

Goett: Throughout my career, I’ve held a variety of roles starting with The Gap and then transitioning to customer service-focused positions within the restaurant industry. In today’s society, individualization is key – people expect to be serviced on a personal level and have things done their way.

To me, marketing is all about providing exceptional customer service. It’s about having tailored interactions that resonate with your audience on an individual level. This mindset has become ingrained in me and I frequently use this perspective as a guide when crafting messaging or developing digital marketing strategies for clients.

I enjoy helping people – whether it’s troubleshooting an IT issue at work or going above-and-beyond to assist our clients with their needs. By taking the time to truly understand who our clients are and what they require from us, we can deliver personalized services that meet their unique needs.

In summary, delivering effective marketing requires understanding your customers’ requirements so you can tailor communication strategies accordingly while also prioritizing excellent customer service throughout every interaction along the way!

Pets, Pet Peeves, and the Glory of the Oxford Comma

Fee: That’s a great answer. So the next question is… do you have any pets?

Goett: This is my favorite. I have a picture I’m going to pull her up.

Fee: Oh, my God. Yeah, she’s adorable.

Goett: I have to admit, my dog is the cutest thing on the planet – although I know everyone says that so there’s no bias here! Living in New York City, my daughter begged me every day for a pet and while I initially had zero interest in getting one, she eventually got her way.

One rainy Saturday with nothing else planned, my husband and I decided to go for a drive – which somehow resulted in us coming home with a dog! Since then, our lives have been transformed. Our new pup has completed our family and brought us so much joy.

She truly is awesome – sweet-natured and always puts a smile on our faces. Despite having reservations about getting a pet at first, it’s safe to say that this decision was one of the best we’ve ever made!

Fee: The converse of that question is, do you have any pet peeves?

Goett: I think one of my pet peeves in general, not work related, is… I don’t know how you feel about this, because I know it’s very controversial, but the lack of the Oxford comma.

Fee: I’m 100% with you on this one.

Goett: It can fundamentally alter language. Proper punctuation and grammar are incredibly important in written communication – they truly do matter!

Fee: If you had said the opposite, that you didn’t like the Oxford comma, let the record show I would have remained silent.

Goett: I’m glad we share the same opinion on this topic! While everyone has their own set of pet peeves, I believe that mine is particularly relevant to our discussion. One of my biggest work-related pet peeves is when people misspell names – it’s a small detail, but it matters.

For me, paying attention to these details demonstrates a certain level of respect and professionalism towards others. It can be frustrating when my own name is misspelled despite being clearly stated in email communications or other forms of correspondence.

To combat this issue within my team, I always make sure to ask individuals how they prefer to be addressed if their name isn’t immediately clear (e.g., whether someone named Kimberly prefers “Kim” or “Kimberly”). These seemingly minor details can have a big impact on overall communication and demonstrate an attention to detail that clients and colleagues appreciate.

Finding the Routine

Fee: Yeah, that’s another great answer. What daily habits or weekly routines Do you have that keep you sharp as a leader and evolving as a marketer?

Goett: I’ll start by saying that my answer might seem generic, but I truly believe in its value. For me, reading is one of the most important activities for staying informed and up-to-date – particularly when it comes to industry-specific news.

I subscribe to a variety of services that bundle news and provide highlights spanning everything from finance to marketing, as well as more general headline news. This approach helps me stay sharp and on top of both micro and macro trends within my field.

In addition to reading, running is another activity that I find incredibly therapeutic. While it can be tough getting back into the swing of things after taking a break from running, once I’m in the zone I absolutely love it! Running gives me time alone with my thoughts where I can reflect on upcoming goals or projects while gaining mental clarity at the same time.

Overall, these two activities keep me feeling grounded while also making sure that I’m constantly learning new information and staying ahead of any emerging trends within my industry.

Fee: What publications are daily reads for you?

Goett: A big mix. I read Snacks (Robinhood), Skimm, and Wired Daily.

Goett on Leadership

Fee: What’s one thing that has played the greatest role in shaping your leadership style?

Goett: I love this question because it reminds me of one of the most impactful books I’ve ever read as a corporate professional – How to Win Friends and Influence People by Dale Carnegie. One story that has really stayed with me over time is about Bob Hoover, a pilot who experienced engine failure due to the wrong type of fuel being put into his plane.

Despite facing an incredibly dangerous situation, Hoover was able to safely land the plane and immediately approached the mechanic responsible for fueling it. Instead of berating or punishing them, he simply stated that from then on he would only allow that mechanic to service his planes since they had learned from their mistake.

This approach really resonated with me and has shaped how I interact with my own team members when mistakes are made. Rather than getting angry or frustrated at someone’s error, I try to empathize with them and use it as an opportunity for growth instead.

As a leader, it’s important to recognize that people will fail – we’re all human after all! What matters is how you help guide your team through those failures in order to grow stronger together. By fostering open communication and encouraging active learning conversations around mistakes, relationships become stronger within teams while also creating opportunities for individual growth along the way.

Giving Back as a Parent

Fee: That’s great. We’re going to pivot over to volunteerism. Yep. How do you give back?

Goett: As a parent, my focus is primarily centered on family and community-related activities that reflect this stage of life. For example, I have been involved in running backpack drives for school supplies within my local New York City community – an effort that seeks to ensure equal opportunity for all students regardless of socio-economic background.

In addition to these initiatives, I also serve as the treasurer for my children’s school, with a focus on how we can best support those children who require additional assistance. This includes volunteering at various school events and fundraisers throughout the year.

Beyond these efforts, my family has also adopted another family who fled Venezuela as refugees. As part of our ongoing commitment to helping others and teaching our own children about empathy and kindness towards others, we provide them with necessary items throughout the year – especially around holidays when they need it most.

For us specifically last winter season was particularly impactful because they needed winter clothes such as hats and gloves which opened up important conversations about privilege with our own kids while bringing us closer together through shared experiences of giving back to those in need.

Digital Transformation

Fee: Yeah, as a kid, it’s very easy to see your situation as normal and standard. Understanding that there are different degrees of equity, and people have access to different opportunities is an important lesson… So let’s switch gears and talk digital transformation. This is my hard question! Without using the words “digital” or “transformation,” define what digital transformation means?

Goett: In my opinion, the answer to this question is quite straightforward. Essentially, it’s about utilizing technology in a way that fosters innovation and drives growth for your business while simultaneously improving how you interact with clients, customers, and employees.

Fee: Cool. Yeah, that’s a great answer. What is something nobody’s thinking about in terms of digital transformation, but you are keenly aware of?

Goett: While I don’t have a crystal ball to predict the future, one thing that is currently top of mind for me – especially in relation to AI – is digital trust and cybersecurity. While it may not be as flashy or exciting as other aspects of digital transformation, I believe this area will only continue to grow in importance over time.

As marketers, we need to stay ahead of trends such as cookies and two-factor authentication while also understanding how they impact our clients and customers long term. This means staying informed on these issues and taking proactive steps towards ensuring that our own systems are secure.

In my past experience working at great firms like Morgan Stanley, I’ve had the privilege of learning from experts like Jen Easterly who emphasized just how important it is to protect ourselves in this ever-evolving landscape. From a marketing perspective specifically, prioritizing cybersecurity should remain a key priority for years – if not decades – to come.

Looking into the Crystal Ball

Fee: Thinking one to five years out, tell me about your predictions for marketing and marketers. What’s coming next? And how do we prepare?

Goett: While I know it’s a topic that many people are discussing these days, I have to say that AI and machine learning are definitely top of mind for me as well. While there is certainly an element of unknowns when it comes to this technology, I believe that the potential benefits – particularly within marketing – could be really powerful.

There seems to be some concern around whether or not AI will ultimately replace human jobs in the industry. However, from my perspective, I think we need to focus on how this technology can help us improve our business practices rather than worrying about its impact on employment rates.

One area where I see great potential with AI is in leveraging customer data to create more personalized experiences for each individual user. By honing in on what each person wants and needs, we can tailor our marketing efforts accordingly while also building stronger relationships with those customers over time.

Of course there are still questions around just how sophisticated these tools will become over time. Even leaders at companies like Google have expressed concerns about the direction things may take. But overall, I remain optimistic about the power of AI and machine learning so long as they align with core values and ethical principles along the way.

Fee: What’s one headline you expect to read in five years?

Goett: VettaFi took over the world. [Laughs]

Why Goett Loves Ted Lasso

Fee: Amazing! I look forward to our conquest. One last thing, can you share with us an album, book, movie, TV series, or other creative work that’s bringing you joy right now?

Goett: Over the weekend, I was spending time with my parents who don’t have an Apple ID. As a result, I logged in to my own account and introduced them to Ted Lasso – a show that I absolutely love.

What really stands out to me about this series is its ability to tackle complex personal issues in such a raw and authentic way. Unlike other TV shows which often focus on individual characters or storylines, every character within Ted Lasso has their own unique struggles and challenges that they are dealing with throughout each episode.

I also appreciate how well-produced and directed the show is overall. The different individuals are showcased so effectively, allowing viewers to truly connect with each person’s journey.

But what really makes this show special for me is its emphasis on positivity. The character of Ted Lasso himself embodies this quality so fully that it becomes like a beating heart at the center of everything else happening around him. He’s just such an endearing character – even though he may come across as nerdy at times!

Fee: Great choice – Did you watch it from the jump? Or did you come on later? Like what was your Ted Lasso journey?

Goett: I didn’t start watching Ted Lasso from the very beginning – it was more so that I heard people talking about it and then decided to give it a try. I believe I started sometime during season one, but by the time season three came around, I was eagerly anticipating each new episode.

One thing that has been challenging for me is the fact that they release episodes on a weekly basis rather than all at once. While this may be a good thing in some ways, as it allows you to savor each installment and not just binge-watch everything at once.

Despite this though, my husband and I have made Ted Lasso appointment viewing within our household. We’ll both put down our phones or whatever else we’re doing and just sit down together to watch each episode attentively.

To stay connected to Megan, you can follow her on LinkedIn. 

This article was originally published June 12th, 2023 on ETF Trends.

An asset manager’s ultimate goal is to choose the right investment vehicle that financial advisors and investors will actually want to use. The best products can solve real investor problems while covering gaps in exposure.

When it comes to packaging these solutions, asset managers have two core investment options: exchange-traded funds (ETFs) or mutual funds. Each wrapper comes with distinct advantages, but understanding the key differences is essential for bringing the most value to investors.

These are the nine strategic considerations every asset manager should use when comparing an ETF vs mutual fund – including what they have in common and how each is beneficial for investment strategies.

ETF vs mutual fund: How are they similar?

ETFs and mutual funds have plenty in common – after all, they’re both baskets of securities. Let’s take a look at where they overlap:

  • They allow investors to build a diversified portfolio containing multiple assets, without having to buy individual stocks.

  • They offer liquidity. However, ETFs are often a more liquid product due to their unique trading mechanisms, which reflect how individual stocks are traded.

  • They provide opportunities to customize a portfolio based on investment strategy, risk tolerance, and investment goals. 

  • They are subject to regulatory oversight.

While it can depend on a person’s investment style and particular investment objectives, portfolios are likely to include a combination of both types of investment vehicles.

Most portfolios rely on having an array of investments across different asset classes. The 60/40 portfolio (60% equities, 40% fixed income) has been a long-running standard, but market uncertainty sometimes gives rise to alts like commodities and REITs. Both ETFs and mutual funds can offer exposure to equities, fixed income, or alts. 

Check out: Best practices for launching an ETF

The 5 benefits of building a portfolio with ETFs

The ETF has seen a boom in recent years. What began as a niche product has become mainstream, as financial advisors and investors are more aware of the advantages the ETF wrapper delivers. 

 Advantages include:

  1. Trading flexibility
  2. Lower expense ratios
  3. Greater tax efficiency
  4. No minimum investment requirements
  5. Greater transparency

 Below, we take a closer look at each of the five advantages to learn why some investors prefer ETFs over mutual funds.

1. Trading flexibility

Because ETFs trade like stocks, they offer enormous trading flexibility. By contrast, mutual funds trade only once per day at a fixed price. ETFs allow intraday trading, giving investors the ability to buy and sell on their own schedule rather than being locked into end-of-day pricing.

2. Lower expense ratios 

ETFs started as index funds, which meant they didn’t require active management and could maintain lower expense ratios than mutual funds. 

While actively managed ETFs have emerged and become an increasingly popular option, they still tend to have lower costs than their mutual fund counterparts. 

This cost advantage persists because ETFs’ structural efficiencies and investor expectations for lower management fees keep expenses down across the entire category.

3. Greater tax efficiency

ETFs typically create lower tax liabilities than mutual funds due to their unique structure and trading patterns. ETFs tend to hold their investments longer, generating fewer taxable capital gains. 

 Additionally, when ETF investors want to sell shares, they trade with other investors on the exchange rather than forcing the fund to sell underlying holdings. 

 By contrast, mutual funds must sell securities more frequently to meet redemption requests, creating capital gains distributions that get passed on to all shareholders.

4. No minimum investment requirements

Mutual funds typically require minimum investments. While some brokers now offer fractional mutual fund shares, this isn’t universally available. 

 ETFs eliminate this barrier entirely: investors can buy a single ETF share for the current market price, making them far more accessible to investors with smaller account balances.

5. Greater transparency

ETFs generally offer greater transparency than mutual funds. Most ETFs disclose their complete holdings daily, giving investors a real-time view of exactly what they own. This transparency helps investors better understand the fund’s net asset value (NAV) and make more informed trading decisions. 

 Mutual funds face no such disclosure requirements and typically reveal holdings only quarterly. Some mutual fund managers deliberately keep their strategies confidential to prevent competitors from copying their positions.

 You might like: 7 tips for cost-efficient ETF operations

The 4 advantages of having a portfolio with mutual funds

ETFs may be gaining popularity, but mutual funds are not without their advantages and still have an important role to play in an investor’s portfolio. As of 2024, 56% of American households have mutual funds in their portfolios, according to the Investment Company Institute. 

Mutual fund benefits include:

  1. Professional fund management

  2. No bid-ask spreads

  3. Automatic investing

  4. No trading commissions

Next, let’s review these four key advantages to understand why some investors prefer mutual funds to ETFs.

1. Professional fund management

While both ETFs and mutual funds offer actively managed options, mutual funds have a longer track record in active management. A skilled portfolio manager can add significant value, particularly during market uncertainty and when making strategic investment decisions about broader market conditions. 

Unlike index funds that must track their benchmark regardless of market conditions, active managers can adapt their strategy in real time based on changing circumstances. This flexibility allows them to potentially protect against volatility, pursue rebalancing opportunities, and maximize returns when possible. 

Although passive mutual funds exist, most mutual funds employ active management. This brings both the potential benefits and higher costs that come with professional oversight.

2. No bid-ask spreads

ETFs have intraday trading advantages, but mutual funds’ once-daily pricing can actually benefit investors in certain situations. Mutual funds eliminate bid-ask spreads entirely: every investor buys and sells at the exact same net asset value (NAV) calculated at the end of the day when the market closes. 

This uniform pricing protects investors from the trading costs and timing pressures that ETF investors face throughout the day. While intraday flexibility creates opportunities for skilled traders, it can also lead to costly mistakes that mutual funds’ simplified structure helps investors avoid.

3. Automatic investing

Mutual funds tend to have the ability for investors to set up automatic investment plans for dollar-cost averaging, supporting long-term financial planning. Generally speaking, ETFs don’t allow for automatic investing.

Automatic investing is a huge perk, as it is a significant benefit for people looking to invest for the long term. This is one reason why mutual funds have become an important vehicle for retirement planning rather than short-term tactical trades. 

A no-load index mutual fund can be ideal for investors who are making routine deposits, as they are sold without a commission or a sales charge. 

4. No trading commissions

Another advantage of mutual funds is the absence of trading commissions, unlike many ETFs that still charge these fees. Combined with automatic investing capabilities, this makes mutual funds particularly cost effective for long-term investors. Without commission fees eroding returns on each transaction, investors can focus on building wealth rather than managing trading costs.

Finding the right fit

Use these nine strategic considerations to help you decide which wrapper is ideal for each of your investors. While ETFs might seem like the natural evolution of the mutual fund, each investment vehicle serves specific investor needs. 

Rather than viewing one as superior, asset managers who recognize the strengths of both ETFs and mutual funds can build better, diverse product lineups that appeal to more investors with different financial goals.

VettaFi helps asset managers at every stage of the product life cycle. If you’re interested in developing an ETF or a mutual fund, talk to one of the experts from our index team or digital marketing team today.

Up next: 7 ETF marketing tactics to attract investors

Software platforms have come a long way since the early days of personal computing in the 1980’s running on MS-DOS and Microsoft Windows. In the 1990’s,  the internet and web platform era enabled new methods of software delivery via browsers and mobile applications.  Today’s software platforms are cloud-based, such as software as a service (SaaS) or mobile applications built for iOS and Android. In addition, artificial intelligence functionality is being integrated with today’s software platforms, combining artificial intelligence with traditional software functionality. 

A software platform provides the foundation or infrastructure upon which software applications can be built and run. From an investment standpoint, software platforms offer many strategic business advantages including: 

  • Low marginal cost - Software platforms are scalable businesses that support high margins and revenue growth at scale with virtually no marginal costs or the need for debt financing. 

  • Competitive moats - Low incremental sales costs means more revenue can be used to innovate, build new products, and provide increased utility to customers, creating a sustainable competitive advantage.

  • Recurring revenue models - Most software platforms operate under  subscription-based models (SaaS), generating recurring revenues with high customer retention.  The SaaS model is also tariff-resistant. 

  • AI and innovation tailwinds - Artificial intelligence and applications such as generative AI are creating new opportunities for software companies, as investor focus shifts from hardware infrastructure to software applications. 

One of the critical strategic advantages for software platforms is scalability. While the marginal cost of traditional goods increases with production due to resource constraints, the marginal cost of digital goods trends to zero as production scales.  As a result, investing in software platforms creates an attractive  opportunity for investors. 

Historic rise of software1

1951 - UNIVAC became the first commercially produced computer, advancing the need for software. 

1952 - Grace Hopper developed the first compiler which translated symbolic code into machine code.   

1960 - COBOL, one of the earliest high-level programming languages, was developed.

1964 - IBM introduced the first family of mainframe computers, the IBM System/360. 

1972 - The C programming language was developed by Dennis Ritchie at Bell Labs, revolutionizing software development and leading to Unix.

1980 - Microsoft’s Disk Operating System (MS-DOS) became the standard operating system for personal computers. 

1984 - The Macintosh, with its graphical user interface, brought more user friendly software to the masses.

1991 - The World Wide Web was created by Tim Berners-Lee.

1995 - JavaScript was introduced, becoming a crucial language for web development.

1997 - Microsoft released Windows 95.

2001 - Apple introduced the Mac OS X.

2002 - The rise of cloud computing coalesced with Amazon Web Services (AWS).

2006 - The Google App Engine cloud platform launched as well as AWS’s EC2, which allowed users to license virtual machines.

2007 - Netflix became a video streaming service on the cloud.

2008 - The launch of the Apple App Store kicked off the mobile application era.

2009 - Microsoft launched Azure marking its entry into the cloud. 

2015 - The term "Artificial Intelligence" gained widespread attention as machine learning and AI become an integral part of software development.

2020 - The Covid19 pandemic gave rise to remote work solutions.

2022 - Quantum computing made critical advancements.

2023 - Generative AI became mainstream with the release of OpenAI’s ChatGPT.

Scalability

In 2011, venture capitalist Marc Andreessen famously announced that “software is eating the world.”2 Andreesssen was referring to software’s role in digitizing industries and transforming and scaling the way businesses and consumers interact. Software companies can maintain high profit margins because the incremental cost of adding new customers is low.  

Software is scalable.  While the marginal cost of traditional goods increases with production due to resource constraints, the marginal cost of digital goods trends to zero as production scales. 

Comparing marginal costs

High substitution costs

Another key attribute protecting profits is that there are high substitution costs associated with switching from one software solution to another.  Users risk losing data, functionality, and productivity time when they make a switch. 

Competitive moats and large barriers to entry

Software vendors often have large barriers to entry given the significant R&D required to maintain functional superiority and service its broad customer base.  This creates a barrier to entry and competitive moat for small startup operations. 

Recurring revenue model

Today, most software companies have adopted subscription based, recurring revenue models.  This business model provides for predictable cash flows assuming there are high renewal rates and low customer churn. 

Premium valuation, superior growth

Given their long-term profitability and scalability, recurring revenue model, and high level of customer retention, software companies tend to trade at above market multiples.  As seen in the table below, companies in the VettaFi AOT Software Platform Index trade at a premium valuation relative to the VettaFi 500 TR Index, but also exhibit superior earnings and sales growth characteristics. 

  VettaFi AOT Software Platform Index VettaFi 500T Index
Trailing Price/Earnings 27.16   22.93  
Forward Price/Earning 26.08   20.99  
Trailing EV/Sales 7.06   4.32  
Forward EV/Sales 6.55   4.11  
EPS Growth (%) 11.32   9.08  
Sales Growth (%) 9.40   5.56  
Dividend Yield (%) 0.45   1.19  
         

Source: VettaFi, as of 6/30/2025

At the forefront of innovation

Historically, software has been at the forefront of innovation and disruption, from the early days of MS-DOS and Windows to today’s digital cloud-based and mobile computing applications. Strides in AI-powered development, quantum computing integration, edge computing, and extended reality are driving the next wave of software innovation, along with other disruptive trends such as low-code and no-code software development.3   Software technology and innovation will play a pivotal role in transforming the digital landscape of the future.

Capturing the rise of digital tollbooths

The software industry is undergoing a profound transformation, shifting from traditional Software-as-a-Service (SaaS) models to a "digital tollbooth" paradigm, where platforms capture a percentage of every transaction processed through their ecosystems. Companies like Toast, Unity, Amazon, Shopify, Visa, Paylocity, and Robinhood exemplify this evolution, positioning themselves as critical infrastructure that automates complex tasks, minimizes human error, and delivers unparalleled value to users. By embedding themselves into the transactional flow—whether it’s processing payments, powering in-app purchases, or streamlining payroll—these platforms function like tollbooths, collecting a small but consistent cut of the revenue they enable. This model not only ensures scalable, predictable revenue streams but also creates high switching costs, as businesses and consumers become deeply integrated into these ecosystems. As automation and digitization continue to reshape industries, the digital tollbooth model represents a powerful investment opportunity, capitalizing on the exponential growth of transactional volume in an increasingly digital economy.

Our index approach

The AOT VettaFi Software Platform TR Index (SOFTT) tracks the performance of the top companies that rely on, contribute to, or create software platforms that enable the functionality and delivery of services.  

The index selected the top ranked companies from its Software Platform universe. Scores used for ranking combine measures of quality and market leadership. 

Companies are classified, based on their business model and activities, as software-driven enterprises where their Software Platform is a main driver of their business, and/or their products are crucial to Software-Driven Enterprises. These companies must be at least materially engaged with 20% of their revenue from software-driven enterprise business activities.

“Software Platforms” refer to integrated software systems or frameworks that serve as foundational technologies enabling the development, deployment, and operation of applications, services, or digital ecosystems. 

These platforms are essential to the functionality and strategic direction of Software-Driven Enterprises, which rely on software as a core enabler of their business models, product offerings, and operational capabilities. Designed to be extensible and scalable, these platforms often support broad user, client, or developer ecosystems. 

Within Software-Driven Enterprises, a Software Platform may include: 

  • Cloud infrastructure platforms – Systems that provide on-demand computing, storage, and networking services (e.g., IaaS and PaaS solutions). 
  • Enterprise software platforms – Core business applications such as customer relationship management (CRM), enterprise resource planning (ERP), and human capital management (HCM) platforms. 
  • Application development platforms – Tools and frameworks that support the creation, testing, and deployment of software applications, including low-code/no-code environments. 
  • Data analytics and artificial intelligence platforms – Platforms that support large-scale data processing, machine learning, business intelligence, and predictive analytics. 
  • Middleware and integration platforms – Software that facilitates communication, data exchange, and interoperability between disparate systems and applications. 
  • Industry-specific software platforms – Specialized platforms designed to meet the unique technological needs of verticals such as healthcare, ecommerce, financial services, education, or logistics. 

Companies that develop, license, or use Software Platforms as a core part of their operations, and whose platforms are mission-critical to the infrastructure, innovation, or service delivery of their enterprise or other Software-Driven Enterprises, are considered relevant under this definition. These platforms often enable digital transformation, operational efficiency, automation, data intelligence, and scalable ecosystems across multiple industries. 

Additionally, companies must trade on eligible US exchanges and meet the following minimum criteria: 

  • 3 Month Average Daily Trading Value

  • 1 million USD Float Market Cap Percent 

  • 20% Full Market Cap: 100 million USD 

At least 80% of the value of the index must be composed of principally engaged companies that derive at least 50% of their revenues from software-driven enterprise business activities as listed in the appendix. The top 50 ranked companies within the index’s universe are selected with a 10 company ranked buffer for current constituents. 

Companies must have a positive Earnings to Price ratio. Ranking is based on the average of a factor score rank and a market cap rank. The factor score is calculated based on a company’s Cost of Goods Sold/Revenue, Earnings to Price, and Return on Invested Capital.

Materially engaged companies (those with less than 50% revenue in software-driven enterprise business activities) are capped at 20% and their excess weight is redistributed pro-rata to the principally engaged companies (those with at least 50% revenue in software-driven enterprise business activities). Constituents are weighted by float modified market cap with a maximum weight of 7.5% and a minimum weight of 0.5%. 

The index rebalances on a quarterly basis on the third Friday in March, June, September, and December. 

The AOT VettaFi Software Platform TR Index (SOFTT) has been licensed by AOT for a daily 2X levered ETF sub-advised by Tidal Financial Group which trades under the ticker symbol SOFL.

More information about the index can be found here.

1https://www.geeksforgeeks.org/software-engineering/evolution-of-software-development-history-phases-and-future-trends/

2Grieb, Frederick. State Street Investment Management, Software: Still Eating the World Just Taking a Pause to Digest, October 22, 2024. 

3Simplilearn, Future of Software Development: Trends & Technologies of Tomorrow, April 26, 2025. 

 

 

Evan Harp sat down with J.P. Morgan Asset Management’s Danius Giedraitis to discuss data, AI, and the future of asset management.

Evan Harp: Tell us a bit about yourself and your work with data.

Danius Giedraitis: I lead a global business intelligence and analytics team within J.P. Morgan Asset Management. We work a lot with trying to use data to drive distribution strategies. So, it's something I'm passionate about, it's something I've seen the growth of firsthand. 

I've been in the industry for almost 15 years. The big “aha moment” for me came at the culmination of a lot of time and energy with our stakeholders in distribution leadership and marketing leadership. One of the things that really felt like data was finally at the table was when we worked with some of our distribution heads to actually create and drive a new coverage strategy. We're talking about a strategy that requires millions of dollars of investment. It requires hiring human capital. It requires a lot of analysis for the market opportunity. 

Historically, data was a foreign language to a lot of leadership. They relied on intuition and anecdotal evidence. Now data has clearly become the centerpiece for distribution strategy. It's embedded in the decision-making framework and continues to integrate and entrench itself into the fabric of our organization, and hopefully many other organizations as well.

Why data matters

Harp: A lot of evidence supports the power of data. McKinsey & Co. has noted that organizations that leverage customer behavioral insights and data outperform peers by 85% in sales growth and more than 25% in gross margin. Despite that, financial services is often seen as trailing other industries when it comes to deploying data. Do you agree finance is behind, and if so, why do you think that is?

Giedraitis: I think there's no shortage of data being generated. For me, the opportunity feels like harnessing it and applying it in the most powerful, intelligent ways, and I would say there are probably worse industries. At the same time, I do think that there's probably still quite a bit of space for finance to more dynamically apply data insights.

And so, I do choose to agree somewhat with that statement, but with the understanding that there are probably some ways that finance actually is quite far along relative to other industries. But I think there's a lot more opportunity to be a little bit more thoughtful with where and how we're using the data that we're generating. 

Harp: Where do financial institutions trip themselves up when it comes to data, and what can they do differently?

Giedraitis: I think some data teams feel like every number or attribute or field that they can report on, they should. So many organizations think that more data equals better outcomes, and I think it is important to consider, with respect to all metrics, that a few metrics matter more to drive the PnL, to drive the customer experience, to drive the customer engagement.

The thing organizations can do differently is to be as thoughtful and intentional with understanding what those metrics actually are. I think a lot of well-meaning effort is put into generating all sorts of new data, at the expense of not collecting and deploying insights from the key metrics and data points that drive the signals that you’re interested in. 

It is also critical to define what your systems of record are like. Because, often, what we see is people copy data to this server and this database and that database, and so you have this spaghetti bowl of data that's copied all over. Define your systems of record. When you have those defined and you have processes to maintain the quality of it, then think about how you start to stitch that data together. Because when you start to stitch the data together, I think that’s when you start to provide more relevant insights, more relevant reporting, and more relevant metrics for the stakeholders.

All of that, I think, goes a long way in terms of getting people comfortable with using data to make decisions.

How to change an organization’s relationship with data

Harp: That makes a lot of sense, but how do organizations actually navigate implementing those changes?

Giedraitis: Organizational change is in some ways just as hard, if not harder, than the actual technology investments, the data investment, etc. However, what I have found is to drive that broader change, understanding, education — it's really hard to centralize it from a small data team. 

What works well is finding the power users, the data-literate individuals across different functions and teams to become extensions of what you're trying to achieve as a data organization. It's very difficult to drive that organizational buy-in without really clearly creating a strategy of education, of building the trust. It starts with leaning on the more data-literate in an organization and building from there.

Once you have the organization properly leveraging data, it can help your market strategy and client experience. Ultimately, you're trying to deliver to a client, a customer, or stakeholder, whoever.

Now, 10, 15, 20 years ago, there were maybe one or two channels of engagement. That has completely exploded in the last decade. And so I think one of the things that's really important to think about and that we have found so critical to understand is, what are our clients interested in? How do you connect their engagement profile across fragmented systems and channels? Has this prospect engaged with one of our webcasts? What other webcasts have they attended? Who are they outside of their professional life? What have our salespeople talked to them about? Are they deeply embedded in our ecosystem, or have they maybe just purchased a product or two? These kinds of insights can help teams deliver the right offers in the right way and drive actual impact.

AI continues to be top of mind

Harp: Let’s pivot to AI. Though controversial in some corners, many organizations are embracing the potential efficiencies AI and machine learning can provide. How should organizations be approaching this new technology?

Giedraitis: I think what we're trying to do, and what a lot of organizations are trying to do, is when you build these machine learning algorithms that deliver some suggestion or some recommendation to a stakeholder, their behavior then can also inform the next iteration or the next version of that capability. A lot of social media organizations are doing this. You think about TikTok, and their algorithms. You think about Instagram, and their algorithms. Getting people more embedded into using data and thinking about data as part of their daily practice is helpful, and it also builds the capabilities and makes them more robust. How people provide feedback and how their behaviors inform future versions of those capabilities is important to consider.

To me, it all bubbles up together, right? And so getting people comfortable, getting people engaged, getting feedback up front and over time evolves the capabilities themselves. It all works together. If you're missing certain pieces of that, the system starts to sort of break down and you're not moving forward.

What I'm seeing is, within our industry, teams need the right data delivered the right way to drive impact, and that AI and machine learning enhances decision-making but still requires human expertise. They can do more with the same, is how we've been framing it, and I think taking out the “no joy” parts of a job away is a big deal. AIso, I think there's a lot of risk and compliance assistance that maybe AI can provide. 

Of course, when you're talking about transforming the client experience, there's still some human in the loop that will need to persist for some period of time.

When it comes to modernizing platforms, that's a hard decision to make because it takes a lot of energy, a lot of investment, and it's sometimes the foundational transformation that's needed to enable the AI capabilities. So, it's not necessarily seen as exciting, and the outcomes aren't felt as acutely by senior leaders right away. But I think, with time, we're going to see more and more from the inside moving out, because that to me feels like the larger opportunities and larger green spaces down the road.

Looking for a partner to help you leverage your data? Talk to our experts.

VettaFi’s Axel Belorde appeared in ETF Stream’s live webinar, “European Defence Revolution: Investing in the Next Generation of Security.” Host and Editor Jamie Gordon and HANetf’s Head of Research Tom Bailey also filled out the panel.

European defence booms amid geopolitical tensions

Bailey outlined the recent history of European defence investing. The end of the Cold War marked a decades-long decline in military spending around the world. Europe experienced this particularly harshly, with huge drop-offs until 2014, when Russia invaded Crimea. This resulted in a pledge by NATO members to achieve a 2% of GDP defence spending target by 2024.  Russia’s invasion of Ukraine has led to substantially more massive spending upticks, with nearly 18% in 2024, and 2025 is on track for even more spending.

According to Bailey, much of the increase in spending is likely to be on equipment, which Europe has historically neglected following the end of the Cold War.

Future of Defence UCITS ETF

HANetf’s Future of Defence UCITS ETF, developed with TMX VettaFi as the index partner, looks to take advantage of the increase in European defence equipment spending. Capping any country at 60% of holdings, guaranteeing enough exposure to Europe and positioning the fund to take advantage of growth in the European defence sector. This unique defence ETF splits its exposures primarily between industrials and technology, including cybersecurity.

 

“It is important to think that there are many areas of defence. You can’t just get it — in terms of exposure in your portfolio — if you buy your traditional industrial exposure,” Belorde noted. Traditional war might be waged on land, sea, or air, but cyber is becoming more critical. “Increasingly, it's more about data, and this is how we built our investment approach.” 

Covering the entire defence value chain

Rather than limiting exposures purely to industrials, Belorde made the case to capture the entire value chain of defence. Hardware is important, but data wins wars, according to him. “The wars of tomorrow, the special operations of tomorrow, often start with cyber attacks.”

One often-overlooked investment arena is in the securing of information flow. In war, data is important but, Belorde noted, “better no data than compromised data.” Companies like CrowdStrike and Palo Alto Networks help provide the data security that is becoming an increasingly critical component of modern warfare.

Further making the case for a diverse array of companies and the importance of cybersecurity exposures in defence investing portfolios, Belorde asked, “When you build great hardware … are you really the best at building great software?”

Cyber defence in future wars

More and more countries in NATO are allocating larger portions of their defence spending to cybersecurity.  Belorde said, “There’s huge danger if the anti-drone assets deployed once or twice do really well, but for example, the signatures get inverted, and your own equipment starts to destroy your own new technology. This is why we want to allocate to cyber defence players.”

The EU view

The European Defence Agency is increasingly seeing the value of cognitive superiority. Achieving that requires:

  • Competition for intellectual superiority
  • Nearly real-time situation awareness
  • A multidomain operational picture
  • Automation of cyber activities

  • Real-time narrative

Belorde noted, “This requires a lot of effort in terms of integration, of permissioning data sets, and increasingly permissioning AI agents into the loop.”

One of Europe’s defence challenges is that it has a fragmented supply chain of in-service weapons. It also has significantly more equipment types, as different countries have different tech preferences, systems of operation, and military doctrine. While the US has 33 different weapon systems to maintain, Europe collectively has 179. Additionally, we have seen such a decline in European military spending — particularly on the equipment side — that some systems are now obsolete but still in service. 

“The problem is, when you want to work together, you do need to integrate data,” said Belorde. “Leaders around the world are increasingly concerned by that, and they want to buy software that solves for that problem.”

It is worth remembering that pure-play cybersecurity companies aren’t common in Europe, and some key firms in defence tech aren’t even listed. “In Europe, you’re just going to have to monitor the private markets and wait for some of the names that are pure play defence technology companies to be listed,” he added.

What the US can reveal about European possibilities

The US Department of Defense spends 1% of its budget on software. That sounds low, but it is a significant difference maker and gives America a military advantage. “To win, you have to spend more on software,” Belorde said. Even if the new administration is looking for budget cuts, it is likely that operational AI software delivering real value will continue to see its share of the pie grow, while legacy ERP-type software creating lock-in but little value and often coupled with costly consulting implementations will suffer. Software spend is expected to increase, including investment in disruptive technologies. “The spending mix has to go more toward operational AI and the overall bucket of software allocations should grow,” he explained.

AI has enormous military potential. BVR (beyond visual range) combat is possible with enough advancements in technology. Anti-aircraft and drone countermeasures, and small, drones can all provide a critical edge. “Increasingly, you will see autonomous systems versus autonomous systems,” Belorde said. As there are fewer and fewer full-time soldiers, the role of robotics and automation are gaining increased military importance. 

Space, above & beyond

One if by land, two if by sea, three if by air and … four if by space? 

Though space might not be a viable option for an invading force, it is likely that it will play an increasingly important role in warfare. Much of this is due to technology, including AI. “AI is pretty good at processing mass satellite imagery and trying to extract information from it,” Belorde noted. 

Human operators are still needed, as AI continues to struggle with picking up on small objects, but satellites in space are expected to play an important role in the future of warfare. This, in turn, also speaks to the importance of automation. The companies that create and maintain satellites are likely to be beneficiaries of increased defence budgets. As geopolitical tensions mount and real-time information becomes critical, companies engaged in conquering “the final frontier” could see increased relevance, creating opportunities for investors.

Looking to learn more about how to index defence? Speak to our experts.

 

The uncertain environment has created a sustained increase in defence spending and heightened demand for advanced, future of defence, military capabilities

The Indo-Pacific region includes the countries of Australia, India, Indonesia, Japan, New Zealand, the Philippines, Singapore, South Korea, Taiwan, and Thailand. The region has become an area of rising strategic importance due to China’s global military expansion, ongoing tensions in the South China Sea related to uncertainty about Taiwan, and most recently an escalation of tensions between India and Pakistan. NATO, the United States, and its allies have identified the Indo-Pacific region as a top defence priority. This has translated into record-high defence budgets, new joint cooperation frameworks such as AUKUS, the U.S.-Japan (USJF) Alliance, and the U.S.-India TRUST, and a renewed focus on technological innovation and capacity expansion.

The Indo-Pacific defence market constituted 22% of the world’s total global defence expenditures in 2024.1 China’s defence spending amounts to 46% of the region’s total, followed by India, Japan, and Taiwan, combining for a total of 26%. While currently 65%-70% of its military inventory is foreign-sourced, increasingly, countries such as Japan, Singapore, South Korea, Taiwan, and India are becoming more self-sufficient from an equipment perspective with
the potential to equip other countries in the region. Defence industrial bases of smaller — but growing — capability are also being cultivated in Australia,
Indonesia, Malaysia, Thailand, and Vietnam. Ultimately, similar to Europe, the future of Indo-Pacific defence is expected to become a region less dependent on foreign-sourced technologies and equipment, with the potential to partner and supply other nations on a surplus basis.

The case for Indo-Pacific defence exposure is as follows:

  • Rising tensions in the region: Rising geopolitical tensions and perceived threats from China, North Korea, as well as regional disputes are fueling record defence spending in the region.
  • Desire for regional autonomy: Push for expanded regional production and innovation along with reduced foreign dependency.
  • Strategic importance driving investment: Policy and budgetary support from NATO, the U.S., and allies, given the region’s strategic importance.

Indo-Pacific defence market

The Indo-Pacific region constituted 22% of the world’s global military expenditures in 2024. China’s defence expenditures amounted to 46% of the region’s total spending on defence, with India, Japan, and Taiwan combining for 26%.2  While currently 65%-70% of its military inventory is foreign-sourced, increasingly, countries such as Japan, Singapore, South Korea, Taiwan, and India are becoming more self-sufficient from an equipment perspective, with the potential to equip other countries in the region.

pie chart showing 21.8% Indo-Pacific defence spending vs 78.3% by the rest of the world

 

 

The Indo-Pacific region includes the countries of Australia, India, Indonesia, Japan, New Zealand, the Philippines, Singapore, South Korea, Taiwan, and Thailand. The region has become an area of rising strategic importance, due to China’s global military expansion, ongoing tensions in the South China Sea related to uncertainty about Taiwan, and most recently an escalation of tensions between India and Pakistan. 

The uncertain environment in the region has created a sustained increase in defence spending and heightened demand for advanced, future-of-defence, military capabilities.  NATO, the United States, and its allies have identified the Indo-Pacific region as a top defence priority. This has translated into record-high defence budgets, new joint cooperation frameworks such as AUKUS, the U.S.-Japan (USJF) Alliance, and the U.S.-India TRUST, and a renewed focus on technological innovation and capacity expansion.

The Indo-Pacific defence market represented 22% of the world’s total global defence expenditures in 2024. China’s defence spending amounts to 46% of the region’s total, followed by India, Japan, and Taiwan, combining for a total of 26%.  

2024 Defence spending by country ($USD)

While currently 65–70% of its military inventory is foreign-sourced, increasingly, countries such as Japan, Singapore, South Korea, Taiwan, and India are becoming more self-sufficient from an equipment perspective, with the potential to equip other countries in the region. Defence industrial bases of smaller, but growing, capability are also being cultivated in Australia, Indonesia, Malaysia, Thailand and Vietnam. Ultimately, similar to Europe, the future of Indo-Pacific defence is expected to become a region less dependent on foreign-sourced technologies and equipment, with the potential to partner and supply other nations on a surplus basis. 

The investment case

The case for Indo-Pacific Defence exposure is as follows:

  • Rising tensions in the region - Rising geopolitical tensions and perceived threats from China, North Korea, and regional disputes are fueling record defence spending in the region.

  • Desire for regional autonomy - Push for expanded regional production and innovation along with reduced foreign dependency.

  • Strategic importance driving investment - Policy and budgetary support from NATO, the U.S., and allies given the region’s strategic importance. 

A growing military presence of the U.S. and China in the region, alongside other regional powers, is fueling demand for “future of defence” advanced weaponry and defence systems.  All of this means, there is more defence and defence technology spending to come, creating growth opportunities for defence and cyber defence companies in the region. According to Forecast International, growth in the Indo-Pacific defence market is expected to reach $534 billion in 2025, with growth to $644 billion by 2030.  

Our index approach

The VettaFi Future of Defence Indo-Pac ex China Index tracks the performance of companies from the Indo-Pacific region ex China that generate revenues from defence and cyber defence spending.

In order to be eligible for inclusion, companies must meet the following requirements:

  • Constituent business operations must derive more than 20% of their revenues from the manufacture and development of defence equipment (military armored vehicles and tanks, weapon systems and missiles, munitions and accessories, electronics and mission systems, and naval ships), defence technology applications, or cyber security and contract with an included country verified by publicly available contract information. 

  • Companies developing naval ships with less than 20% defense related revenue may be added if their defense related revenue is at least $3 billion USD.

ESG/human rights filter: Constituent business operations must comply with United Nation Global Compact (UNGC) principles and Organization for Economic Cooperation (OECD) Guidelines for Multinational Enterprises.  

Controversial weapons filter: Constituent business operations must derive less than 20% of their revenue from controversial weapons.

Weighting: Constituents are modified free float-market cap-weighted. The Index is reconstituted and rebalanced on a quarterly basis on the fourth Tuesday in January, April, July, and October.

VettaFi’s Future of Defence Indo-Pac ex China Index (IPDEF)  has been licensed in Europe by HAN ETFs for an exchange traded product expected to launch in July 2025. For more information about the Index, click here. 

Expense ratios have become more and more competitive, creating opportunities while putting pressure on fund managers. With more than 3,000 exchange-traded funds (ETFs) on the market, investors are gravitating toward those with lower expense ratios — making low-cost operations a necessity. 

There are unavoidable admin fees and operational expenses associated with every fund, but streamlining your ETF index maintenance costs can give you an edge. Lowering maintenance costs also lowers your fund’s expense ratios, which means investors are far more likely to invest in your product. 

Here’s how ongoing maintenance costs impact your ETF expense ratio, with tips for the best ways to minimize these recurring expenses.

Why do investors care about your ETF expense ratio?

Savvy investors know that every ETF expense ratio comes directly out of their returns. Over time, those seemingly small percentages can add up and devour your ETF’s performance.

When investors compare two similarly performing funds covering the same market exposures, the choice becomes mathematical: why give up 0.50% of your returns when you could give up just 0.25%? Unless that higher-cost fund offers something exceptional in track record or differentiation, the lower expense ratio wins every time.

This puts pressure on fund managers to keep their net expense ratio as competitive as possible. ETF expense ratios have been steadily declining, with 2024 averages hitting 0.14% for index equity ETFs and 0.10% for index bond ETFs. Low expense ratios are part of what’s driving ETFs toward dominance, especially when compared to equity mutual funds, which averaged 0.40% in 2024.

Core ETF maintenance costs

Issuers who want the lowest possible ETF expense ratio should consider the annual fees for the following maintenance expenses:

1. Index licensing expenses

The right index determines what investors will benchmark your performance against and shapes the entire investment experience for any index fund or ETF. When launching new funds, issuers need responsive index partners who can translate their market vision into a trackable benchmark.

Even if your ETF is already live, it’s worth it to periodically review your options. A licensing fee difference between 0.03% and 0.04% might seem trivial for a $10 million fund, at just $3,000 versus $4,000 annually. But scale that same ETF to $10 billion in assets, and suddenly you’re choosing between paying $30 million or $40 million. That $10 million difference can make or break the competitiveness of your ETF.

2. Rebalancing expenses

Over time, funds must rebalance in order to maintain their strategy. Every fund has a deliberate strategy behind its asset allocation and risk profile. 

Some investments might outperform others, or new opportunities may arise. Rebalancing a fund to make strategic adjustments and maintain that vision comes at a cost.

3. Custodial and safekeeping expenses

Every investment needs safekeeping. A fund’s assets require a custodian to hold them, which comes with fees. ETFs that hold foreign securities or use investment strategies centered on complex financial instruments are more challenging for custodians to manage and can carry higher fees.

4. Administrative and legal expenses

Every ETF comes with administrative and legal fees, which cover everything from regulatory compliance and SEC filings to board oversight and audit costs. Keeping these fees low can help issuers keep their expense ratios grounded.

Legal costs can swing up or down with regulatory changes and documentation updates, so keep a close eye on them. While they might look like fixed overhead, fund managers can find ways to cut expenses without cutting corners, making their ETF operations more cost efficient.

Related: 7 tips for cost-efficient ETF operations

Index licensing costs

As discussed, licensing an index for a new fund that hasn’t built significant AUM typically costs 0.03-0.04%. Specialty indices command higher fees, but even these specialized options rarely exceed 0.10%.

Self-indexing offers one way to avoid licensing fees, but it comes with its own costs and time requirements. For many issuers, self-indexing can actually be more expensive than licensing an index from a provider.

Types of indices

Different index types carry a variety of associated costs:

  • Broad-based indices track the performance of a group of stocks. These stocks are selected to represent the broader market. Examples include the S&P 500, NASDAQ Composite, and Russell 3000.
  • Specialty indices are narrowed to a specific niche. TMX VettaFi’s ROBO Global Robots and Automation Index (ROBO), for example, focuses on the global value chains of robotics, automation, and enabling technologies like AI. 
  • Custom and direct indices are often considered the next frontier of investing. Direct indexing can create simulacrums of existing indices, while custom indexing creates more personalized indices.

Evaluating index licensing costs 

All index types have unique needs that can impact licensing costs. Here are some questions to consider:

  1.  What is the licensing fee?
  2.  Is this fee fair, considering the maintenance challenges and complexity of the index?
  3.  How will the rebalance frequency impact costs?
  4.  How complex will maintaining this index be?
  5.  What is the methodology, and will it have an impact on costs, fees, or overhead?

If an issuer creates their own bespoke index, they may end up dividing their time and energy between managing the index and the product, further underscoring the value of a good index partner. 

“The relationship between asset manager and index providers is crucial to the success of an ETF,” said TMX VettaFi’s Cinthia Murphy. “As the product provider, what you want is not just a vendor who’s behind a benchmark development and calculation, but a true partner who’s committed to the growth of the product, fighting in the trenches with you. VettaFi is unique from that perspective because the business model is built on partnerships. From index creation and calculation to ETF product marketing and distribution, VettaFi is a partner committed to each index ETF’s ultimate success.”

Rebalancing costs

Another common ETF cost comes from rebalancing. When an index adds or removes companies, ETFs tracking that index must adjust their holdings to stay aligned. This process creates tracking differences, the gap between an ETF's performance and its underlying index.

Tracking differences are normal and expected. ETFs typically trail their benchmark slightly, though not always. Tracking error is a related but different metric that measures variability rather than performance. It’s calculated using the daily return differences between the fund’s total return and the underlying index.

Each rebalancing requires buying and selling securities, which generates transaction costs. Some ETF types face higher rebalancing frequency: equal-weight products, for example, must rebalance regularly to maintain their target allocations. These frequent transactions can increase costs and tracking differences.

While tracking differences and tracking errors are normal, consider how often your product will need rebalancing and what trading costs those transactions will generate.

Administrative and legal costs

Administrative and legal costs represent a significant part of any ETF’s expense structure, starting with registration fees that depend on several factors. 

At minimum, expect to pay $50,000 for initial registration, but it’s usually much higher. Beyond that, fund managers are usually on the hook for around $200,000 to $250,000 in annual admin and legal expenses. Some ETFs cost even more to register and maintain.

Operational expenses include those associated with the following annual expenses:

  1.  Paying your legal fees
  2.  Paying lawyers to handle the regulatory paperwork and prospectus filing
  3.  Paying the board of directors who provide governance and oversight
  4.  Paying your trading desk to manage daily trades and redemptions
  5.  Custodial fees
  6.  Record keeping fees

These fees add up. Since growing your assets under management (AUM) takes time, ETFs benefit from substantial seed funding to create a long runway and a better chance of success.

Custodial and safekeeping costs

Every fund needs a place to house its assets, and financial institutions charge custodial fees for this safekeeping service. These fees vary significantly based on the types of assets the fund holds, with costs typically assessed against the fund’s average assets or total assets.

Foreign securities carry additional fees that domestic assets don’t face. The more specialized or complex the asset class, the higher the custodial costs typically become. As these fund fees compound, understanding the full expense structure is essential when preparing to launch a product.

However, administrative strategies can help control custodial fees. Consolidating accounts and leveraging prime brokerage relationships can reduce some of these costs.

Read about: Best practices for launching an ETF

Other operational costs to know about

Beyond core maintenance, ETFs have other operational expenses that impact the overall expense ratio: marketing and listing costs.

Marketing expenses

Every ETF needs a smart, full-funnel marketing strategy to bring in flows, but it can increase operational costs that impact the ETF expense ratio. 

A small, unknown fund will struggle to attract flows compared to a larger fund with brand recognition. Always consider your marketing and distribution budget from the start. The right index partnerships can help you keep some of your marketing expenses down.

Ultimately, your goal should be to find the right balance: spend too little on marketing, and the ETF may never gain enough momentum before its seed funding runs out. Spend too much, and the higher expense ratio could make the fund less competitive with investors.

For a fund to succeed, investors need to know it exists. VettaFi has a soup-to-nuts approach to index partnership, helping asset managers build products and then supporting them throughout the product life cycle. 

You might like: 7 ETF marketing tactics to attract investors

Listing expenses

For a product to be traded, it must be listed on an exchange. Making that happen comes with its own set of costs. Exchanges charge listing and maintenance fees for every product that trades on their platform, and those fees can vary depending on a variety of factors.

Some exchanges offer better rates for larger funds or high-volume trading, while others give discounts when you list several ETFs with them. Some newer exchanges also compete by offering lower fees, so be sure to compare options and negotiate terms that make sense for your fund’s size and growth plans.

For the NYSE Arca, issuers won’t have to pay a fee for “generic” ETFs. Non-generic strategies (such as commodity-based trusts) could see fees of roughly $10,000. Actively managed ETFs will face a slightly higher fee than passively managed funds.

Additionally, listing maintenance costs can range from $5,000 to $40,000, depending on whether a fund is active or passive. The number of issued shares matters, too, with more shares held by investors driving a higher fee.

When thinking about listing fees, remember that:

  • Every exchange is slightly different
  • Active funds pay higher listing fees than passive funds
  • Non-generic products will pay higher fees than generic products

Conclusion

Issuers need low ETF expense ratios to compete for investor attention, which means focusing first on core maintenance costs:

  • Index licensing fees
  • Rebalancing costs
  • Custodial fees
  • Administrative an legal expenses

When you have an index partner who can ease the day-to-day management of your fund, it will go a long way toward keeping your costs low or differentiating your product enough to warrant the higher expense ratio. VettaFi helps issuers build and grow products. Talk to our experts when you put together your next product.

 

“A revolution is coming - a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough - but a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability.” 

-Robert F. Kennedy
Stillness is an illusion. Change and revolution are inevitable. Even on a cellular level, our bodies are constantly changing, with old cells being replaced by new ones as we grow and age. On a societal level, ideas codify, then calcify, and then crumble as newer ideas evolve around them and take their place.
 
Asset management has seen many revolutions. The mutual fund changed investing, until it was disrupted by the ETF. The COVID-19 pandemic upended how people think about work, changing the face of distribution and ushering in a digital era.

The data revolution, isn’t just coming. It’s here.

In brief

The asset management industry benefited for the past two decades from accommodative central bank policies and a long-legged bull market. But rising interest rates and talk of recession are creating headwinds for asset managers – headwinds that will force companies to evolve to succeed. “With the collapse of a built-in bull market to support revenue growth, preexisting pressures on the asset management business have been exacerbated and will continue to put a dent in profitability. Asset managers should transform their approach to profitability. They can do this by understanding the drivers of key costs and using multiple initiatives to optimize costs, rather than just slash expenses.” 1

To succeed, we believe asset managers need to drive efficiencies and adapt across three areas: product, distribution, and data.
 
  • To survive in this environment, asset managers must do more with less and gain efficiencies across the product lifecycle.
  • The biggest key to success is unlocking the power of data. Data is critical at all stages of a business maturity model because it presents an opportunity to increase efficiency and lower costs.
  • The world is digitally transforming, and the next generation of investors are digital natives. Traditional distribution strategies are seeing diminishing returns; asset managers need to embrace digital to complement traditional sales approaches.
  • The rise in popularity of the exchange-traded fund (ETF) has led to a proliferation of product offerings in the marketplace. To stand out, asset managers must lower costs, create products that generate higher alpha, or zero in on unique investment themes.

The product evolution through product revolution

To truly understand revolutions, you must step back and understand history to see how every moment is steeped in what came before.

Once reserved for the elite, investing has become increasingly democratized over the past century. The earliest forms of investing began with the trading of various commodities and debt. The creation of the forerunner to the S&P 500 in 1923 was a massive revolution in investing. It introduced a tool to track broad market performance rather than simply individual stock performance – which provided investors with something to measure individual securities against.

1. BCG’s Global Asset Management, May 2023. “The Tide Has Turned.”

Data has become essential to all businesses. Asset managers and financial services in general have lagged behind other industries when integrating data into their sales and marketing practices. Accordingly, issuers that wish to be the winners of tomorrow need to evolve their data practices today.

How to master data for sales growth 

Consumer-facing apps, like UberEats, deploy customer behavioral data to drive revenue. By tracking the types of foods a consumer prefers, they
personalize promotions and offers to match likely purchase behavior. After an order is placed, they follow up with recommendations based on behavioral
data—highlighting items that are easily added to the order. In short, evolved data practices mean better predictive analytics. This translates to sales
efficiency, more opportunities, and more profitable sales. Asset managers, by comparison, are now starting to leverage investor behavioral data for predictive analytics. It is not yet a widespread practice, but it is the key to unlocking success. 

According to Mckinsey & Co., organizations that leverage customer behavioral data outperform their peers by 95% in sales growth and more than 25% in gross margin.

Data-driven decision-making 

Do you agree or disagree? The financial services industry lags behind in using data to drive distribution and business growth.

A recent poll of asset managers shows that they largely agreed that financial services lags when it comes to using data to drive distribution and business growth. 

Data can provide critical insights and inform strategies that can lead firms to perform better and grow faster than firms who might not have access to or properly deploy data. Distribution teams in financial services have been slow to integrate data—creating a major opportunity for firms that move early toward data-driven decision-making. Companies that can stitch together relevant, timely data can use it to inform strategies and capture a bigger market share than companies that are haphazard in their use of data or lacking in quality data. 

While there are many exchange traded funds in the marketplace offering exposure to the theme of artificial intelligence, there is a rising need for a product that provides exposure to what Goldman Sachs labels, “the next phase” of the artificial intelligence investment, AI infrastructure. Indeed, a new investment category has emerged at the intersection of artificial in intelligence and infrastructure, attracting billions of dollars of investment capital. Some of the world’s largest investors are racing to fund the physical backbone required to power AI computations: from processors to data centers to power plants. 

While some of the early investment beneficiaries of generative AI adoption were software applications and semiconductor chip makers such as Nvidia, Goldman Sachs research predicts the next phase of the AI trade will be in AI Infrastructure. Goldman predicts companies that stand to benefit from the buildout of AI-related infrastructure will include: semiconductor designers and manufacturers, cloud providers, computer and network equipment makers, data center real estate investment trusts, utilities, and security software providers. 

The investment case for AI Infrastructure is clear.

  • Generative AI fueling explosive demand for compute and storage - The rise of generative AI and large language models (LLMs) requires unprecedented need for computational power, data storage, and a purpose-built AI infrastructure.

  • Rapid market growth - The global AI infrastructure market is projected to grow from around $135.8 billion in 2024 to between $394 billion and $521 billion by 2030, with annual growth rates approaching 20–30%.

  • Massive infrastructure spending and energy consumption - Spending on AI datacenters alone is expected to exceed $1.4 trillion by 2027. Along with data center expansion comes increased energy needs. Data centers currently consume ~415 TWh annually (1.5% of global electricity) with AI accounting for 15% of this energy consumption (62 TWh).

  • Institutional and government support - Major tech firms (Alphabet, Amazon, Meta, Microsoft) and institutional investors ( eg. BlackRock, KKR) are allocating hundreds of billions toward AI infrastructure projects. Governments are also providing incentives and funding to secure national competitiveness in AI.

Our index approach

The VettaFi AI Infrastructure Index (VFAII) tracks the performance of companies that are components of the artificial intelligence infrastructure ecosystem. To qualify for selection into the index, a constituent must be a leading player in at least one of the following six segments crucial for the continued advancement of artificial intelligence:

    1. Big data/analytics – Companies at the forefront of extracting valuable insights from data using AI to help the user make informed decisions. 

    2. Cloud providers – Companies providing access to AI processes and tools over the internet in addition to flexible and scalable data storage, platform, and application services. 

    3. Data centers and connectivity – Companies involved in managing physical facilities or providing the necessary components for IT infrastructure and data storage for AI compute needs. 

    4. Energy powering AI – Companies offering specific solutions to support the increased energy usage needed to power data centers and cloud providers utilizing AI. 

    5. Network & security – Companies safeguarding computer networks through AI-driven behavioral analytics to improve threat detection and limit vulnerabilities. 

    6. Semiconductor and computing systems – Companies designing, fabricating, or developing semiconductor chips or quantum computing systems and cognitive computing systems for AI applications.

Segment determination is based on VettaFi’s proprietary in-house research, supported by a team of industry experts (VettaFi Research Team) that maintain a unique and broad database of companies and classifications across the globe that have operations associated with the listed segments. The VettaFi Research Team examines each company’s position within their segment taking into account revenue purity and leadership. To be eligible for classification, a company’s technology, services, and/or business model must fit into one of the identified subsectors advancing artificial intelligence and its supporting infrastructure.

Constituents are float-market cap-weighted. Segment weights are capped at 20% while individual constituent weights are capped at 5% with a minimum weight of 0.50% assigned to constituents. Excess weights are distributed proportionately.

The Index is reconstituted and rebalanced on a quarterly basis in March, June, September, and December. 

VettaFi’s AI Infrastructure Index (VFAII) has been licensed in the US by Grayscale for an exchange traded product expected to launch mid July 2025. For more information about the Index, click here. 

Software platforms have come a long way since the early days of personal computing in the 1980’s run on MS-DOS and Microsoft Windows. In the 1990’s  the internet and web platform era enabled a new method of software delivery.  Today’s software platforms are cloud-based as software as a service (SaaS) or mobile applications built for iOS and Android. 

From an investment standpoint, software platforms offer many strategic business advantages including: 

  • Low marginal cost - Software platforms are scalable businesses that support high margins and revenue growth at scale with virtually no marginal costs or the need for debt financing. 

  • Competitive moats - Low incremental sales costs means more revenue can be used to innovate, build new products, and provide increased utility to customers, creating a sustainable competitive advantage.

  • Recurring revenue models - Most software platforms operate under  subscription-based models (SaaS), generating recurring revenues with high customer retention.  The SaaS model is also tariff-resistant. 

  • AI and innovation tailwinds - Artificial intelligence and applications such as generative AI are creating new opportunities for software companies, as investor focus shifts from hardware infrastructure to software applications. 

Scalability: A critical advantage for software platforms

As demonstrated in the graphic below, while the marginal cost of traditional goods increases with production due to resource constraints, the marginal cost of digital goods trends to zero as production scales.  This provides an important strategic advantage for software platform companies. 

Source: The Zero Marginal Cost Society, Jeremy Rifkin

Our index approach

The AOT VettaFi Software Platform TR Index (SOFTT) tracks the performance of the top companies that rely on, contribute to, or create software platforms that enable the functionality and delivery of services.  

The index selected the top ranked companies from its Software Platform universe. Scores used for ranking combine measures of quality and market leadership. 

Companies are classified, based on their business model and activities, as software-driven enterprises where their Software Platform is a main driver of their business, and/or their products are crucial to Software-Driven Enterprises. These companies must be at least materially engaged with 20% of their revenue from software-driven enterprise business activities.

“Software Platforms” refer to integrated software systems or frameworks that serve as foundational technologies enabling the development, deployment, and operation of applications, services, or digital ecosystems. 

These platforms are essential to the functionality and strategic direction of Software-Driven Enterprises, which rely on software as a core enabler of their business models, product offerings, and operational capabilities. Designed to be extensible and scalable, these platforms often support broad user, client, or developer ecosystems. 

Within Software-Driven Enterprises, a Software Platform may include: 

  • Cloud infrastructure platforms – Systems that provide on-demand computing, storage, and networking services (e.g., IaaS and PaaS solutions). 
  • Enterprise software platforms – Core business applications such as customer relationship management (CRM), enterprise resource planning (ERP), and human capital management (HCM) platforms. 
  • Application development platforms – Tools and frameworks that support the creation, testing, and deployment of software applications, including low-code/no-code environments. 
  • Data analytics and artificial intelligence platforms – Platforms that support large-scale data processing, machine learning, business intelligence, and predictive analytics. 
  • Middleware and integration platforms – Software that facilitates communication, data exchange, and interoperability between disparate systems and applications. 
  • Industry-specific software platforms – Specialized platforms designed to meet the unique technological needs of verticals such as healthcare, ecommerce, financial services, education, or logistics. 

Companies that develop, license, or utilize Software Platforms as a core part of their operations, and whose platforms are mission-critical to the infrastructure, innovation, or service delivery of their enterprise or other Software-Driven Enterprises, are considered relevant under this definition. These platforms often enable digital transformation, operational efficiency, automation, data intelligence, and scalable ecosystems across multiple industries. 

Additionally, companies must trade on eligible US exchanges and meet the following minimum criteria: 

  • 3 Month Average Daily Trading Value
  • 1 million USD Float Market Cap Percent 
  • 20% Full Market Cap: 100 million USD 

At least 80% of the value of the index must be composed of principally engaged companies that derive at least 50% of their revenues from software-driven enterprise business activities as listed in the appendix. The top 50 ranked companies within the index’s universe are selected with a 10 company ranked buffer for current constituents. 

Companies must have a positive Earnings to Price ratio. Ranking is based on the average of a factor score rank and a market cap rank. The factor score is calculated based on a company’s Cost of Goods Sold/Revenue, Earnings to Price, and Return on Invested Capital.

Materially engaged companies (those with less than 50% revenue in software-driven enterprise business activities) are capped at 20% and their excess weight is redistributed pro-rata to the principally engaged companies (those with at least 50% revenue in software-driven enterprise business activities). Constituents are weighted by float modified market cap with a maximum weight of 7.5% and a minimum weight of 0.5%. 

The index rebalances on a quarterly basis on the third Friday in March, June, September, and December. 

The AOT VettaFi Software Platform TR Index (SOFTT) has been licensed by AOT for a daily 2X levered ETF sub-advised by Tidal Financial Group which will be launching in July of 2025. 

More information about the index can be found here.

 

Thematic ETFs might have fallen somewhat out of favor in the era of nonstop megacap growth, but as that era comes to a close, investors should explore their options. As thematics become more relevant, identifying the themes that will shape the future is critical. In the recent Midyear Outlook Symposium, Amplify’s CEO Christian Magoon and Xtrackers’ Head of DWS Research Institute Robert Bush shared their thoughts on the comeback of thematic ETFs. TMX VettaFi’s Kirsten Chang moderated the discussion.

Christian Magoon

Amplify’s Christian Magoon

Do call it a comeback

“Thematic is back,” Magoon said, noting that eight of Amplify’s thematic ETFs have outperformed the S&P 500. “It is time for advisors to take a look at it and add alpha to their broad-based investment portfolios.”

Thematic ETFs benefit from the ability to reinvent themselves. In 2021, cannabis ETFs had a brief moment, but other themes have since emerged, including AI.

How much of your portfolio should go to thematic ETFs?

Magoon thinks 5%-10% of portfolio allocations is a sweet spot for thematic ETFs and that different themes can play different roles in a portfolio. “There are some themes that are more of a trading opportunity than a long-term hold.” Time horizon is an important consideration for investors. Some trends could be short term and some could matter a great deal in the future.

Bush noted that there are thematic ideas that can span multiple sectors and some that can be incredibly niche. “You have to think about the economy of tomorrow,” he said.

Tales from the crypto

Crypto is moving quickly and garnering attention from more institutional investors. “Year to date, a spot bitcoin ETF is the 4th-highest inflow ETF right now,” Magoon said. He noted the Amplify Transformational Data Sharing ETF (BLOK) has been helpful for investors looking for exposure. Crypto volatility remains an issue, but has come down as more institutional investors have entered the space. It remains uncorrelated, and a potentially useful diversifier. BLOK has averaged more than 16% per year returns, according to Magoon.

The world is a (video game) stage, and we are merely players

The Amplify Video Game Leaders ETF (GAMR) tracks the VettaFi Video Game Leader Index. GAMR is a terrific example of an attempt to cover a growing theme. “Three billion people game. The most popular sport is soccer, and only 200 [million]or 300 million people engage with soccer,” said Magoon.

GAMR has diverse exposure throughout the entire gaming ecosystem, including everything from mobile developers to the companies that make computer chips.

Given the importance of gaming globally and culturally, the video game ecosystem could provide investors with opportunities.

Artificial intelligence discussion closes out midyear symposium

Thematic ETFs are making a comeback, and one theme in particular dominates conversation. Artificial Intelligence remains top of mind for investors. TMX VettaFi’s Zeno Mercer and Todd Rosenbluth discussed the disruptive technology.

Mercer kicked things off by taking issue with the term ‘artificial intelligence,’ noting, “Its not artificial anymore, it’s real.” He shared his preference for the term “digital intelligence.”

Zeno Mercer and Todd discuss Artificial Intelligence

Asked about the recent 2025 advancements in the AI field, Mercer said open source intelligence has been accelerating. “If you look forward on a five year horizon,” Mercer said, “individuals and institutions will have more options.” 

Artificial intelligence continues to generate interest

In a poll of attendees, two thirds saw artificial intelligence as a topic “worth learning more about” while 11% said it was overhyped. “I’ve been using AI for over a decade now, it was a very slow ramp up to get to where we are today,” Mercer shared. “Now, I do feel like it's underappreciated.” As such, Mercer sees AI as becoming more nuanced and personalized instead of relying on broader categorizations. 

Mercer envisions artificial intelligence as becoming better with data and increasingly personalized to the user experience. Right now, artificial intelligence leverages broad demographic decisions. Basically, a man in his thirties might get fed information or opportunities based on things other men in their thirties enjoy. But soon AI will more accurately see who an individual is. Consequently, it will better be able to comport to their needs.

I THNQ, therefore I am

The ROBO Global Artificial Intelligence ETF (THNQ) has two thirds of its exposure to AI infrastructure. “AI is increasingly going to be tethered to interacting in the real world,” said Mercer. He noted robots and autonomous vehicles require strong connectivity because they act independently. 

Asked if there was an interesting recent company that has been added to the roster, Mercer pointed to Tempus AI. That company aims to create an “AI healthcare quarterback.” Accordingly, Mercer sees it as an exciting example of  how AI can be used to improve both clinical care as well as research.

Interested in learning more about how VettaFi can help you build a thematic index? Reach out to our experts.

VettaFi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for GAMR and THNQ, for which it receives an index licensing fee. However, GAMR and THNQ are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of GAMR and THNQ.

VettaFi interviewed  Microsoft Director Gaby Marano on data and AI.

VettaFi: Tell us about your background with data and AI.

Gaby Marano: I was lucky enough to begin my journey in data and AI years ago at JPMorgan where I started as a business analyst in their Big Data innovation lab.  Then I ultimately became one of the firm’s first AI product managers and Executive Director for flagship product teams. My mandate was to lead the research, design, development, and deployment of emerging technologies and to deliver them as integrated, profitable digital solutions for lines of business. Along the way, I ended up defining a lot of the AI product development frameworks used to start embracing probabilistic systems within the legacy tech. 

Throughout that time, the data and AI tools in market were rapidly advancing — from public cloud services to computing infrastructure to machine learning to generative AI — so my role was to stay abreast of these changes, create focus on how they could impact the overall business strategy, put together complicated roadmaps with success metrics, and guide change management for adoption. I really loved my time there, but then mid-last year, I was offered an interesting opportunity to join Microsoft in the heart of their pivot to becoming an AI-led company. Now I serve as an industry advisor for financial services, partnering with investment firms and tech firms to solve the next big things for capital markets. Never a dull moment!

VettaFi: One of the challenges with businesses using data more effectively is that people have different degrees of awareness and comfort. Is there a way for more old-school industry leaders and the experience they bring to the table to incorporate data, or will there always be some philosophical tension?

Marano: I think finding the best solution will always require harmony between data perspectives and business perspectives. One example early in my career that cemented this was a late-night meeting where we had industry heads with decades of experience in the same room as skilled-but-fresh data scientists working together to forecast a market. We were all debating each other from very diverse perspectives and it was amazing to see how both schools of thought were so important to solving the problems at hand. I remember one executive who was quickly able to poke through the data analysis and explain where some underlying assumptions that only a seasoned professional would know were missing. And then the data scientists were able to pull out new trends emerging that the executives didn't expect to see. The collaboration was awesome and we were able to find clarity by the end. 

In the age of AI, we all talk a lot about how much we love to innovate, but innovation is inherently uncomfortable. When working on initiatives that will transform and disrupt, trust becomes more important than ever between data teams and the rest of a firm. People need to believe the data is credible before they will agree to make decisions based on it or change their behaviors. It takes time to earn that trust, which requires proceeding at a pace that makes sense for the organization as a whole — even when some brilliant individuals can go faster. Before charging ahead, I always recommend focusing on ensuring all the functional stakeholders believe in the vision and commit to heading in that same direction.

The state of data in asset management

VettaFi: How would you describe the current state of data for asset managers?

Marano: Well, if you look at more consumer-focused companies, I think it is revealing that asset management is behind the curve in terms of what’s possible. My music app always knows what I want to listen to next. My maps app proactively assumes where I’m about to go and gives me the quickest and easiest route there. While asset managers get to enjoy this kind of personalized intelligence and acceleration in their home life, it starts to set a higher bar for their employee and client experiences. Alternative data has been a big priority for investment teams for a while now, but finding the signal in the noise is still difficult. It is exciting to see the distribution side in particular now starting to warm up and adopt GenAI, but overall I think we still have some more ground to cover across the space at large to truly see an impact.

VettaFi: What are some of the biggest mistakes companies make when they try to integrate data?

Marano: One big misconception I see is the idea that more data equals better outcomes. We see that debunked time and time again once organizations realize the need to have your different data sets talk to each other and the complexity in getting consistent answers to make decisions. What seems like a really intuitive business question traditionally can take days or even weeks of data management and cross-team dependencies to confidently pinpoint an answer.

Then after you overcome the underlying data problem, another place I see room to grow is in reporting. Having a report doesn't always mean you have an insight. People might be getting loaded with reports in their inbox every day that they marked as spam, or they have access to so many dashboards that they don’t use. Reports and dashboards are becoming easier to spin up in isolation but harder to integrate into a multidimensional, interconnected, holistic view into a business. There’s often a ton of strain placed on the data teams to predict and prepare every version of a question that might be asked of the data. Trying to build a one-stop shop for insight is a very tough spot to be in. 

One more idea I see being challenged is that data is just your traditional view of numbers in rows and columns. That’s not the case; it is text too, especially in distribution. Our sales teams are out talking to folks all day long, and the content of those meetings might not appear to be data in the traditional sense, but there's so much we can do around different types of language data to extract that knowledge and share it across teams. It used to be a post-it note in a rolodex and now it's a call note in your CRM system, right? Well, now we’re moving to Teams meeting transcriptions with critical multimodal information that can automatically flow into sales and marketing processes, instead of requiring a ton of manual data management efforts to log what you learned.

Why AI could change everything for asset managers

VettaFi: Speaking of language data, let’s pivot to AI. What do you make of it as a tool?

Marano: I love it and I use it every day now. It's been really exciting now to see the push towards talking to massive amounts of data in a more conversational way.  With the rise of Microsoft Copilot and other “ask me anything”-type tools, the barriers to entry for data analysis are coming down quickly and it’s easier than ever to learn almost anything. I still think we’re in very early innings though.  

And back to data for a second — these GenAI chat tools are only as powerful and knowledgeable as the underlying data you connect to them. This whole craze really allowed so many more people to start thinking about data differently and come to the table to help design the future of AI-led businesses. How do we pass all of our enterprise intelligence back and forth in a momentous way where people are building off of the info from the person prior and workflows are moving seamlessly across teams in an organization? At Microsoft, we’re also focused on how agents can help fit into that puzzle where actions are taken autonomously on your behalf based on this fluid stream of endless input scenarios. 

I think AI is here and it's here to stay. Agents are also right around the corner. The more you can try out some of these newer tools, share that feedback, and help build that efficient, well-executed relay race between data, sales, marketing — and even agents — the better. 

VettaFi: Do asset managers have specific challenges and needs that data and AI could help solve? And what are the current obstacles?

Marano: The big theme I hear the most often is around how we use AI to allow employees and clients to self-serve as much as possible, so we can free up a lot of time to focus on the more important and exciting parts of the workday. In Microsoft’s recent Work Trend Index, we found that employees are interrupted about every two minutes between 9-5 and meetings outside typical work hours are up significantly year over year — creating a seemingly “infinite workday.”

If I think about why people were drawn to work as asset managers, it's typically not to spend hours perfecting the formatting and coloring of a deal doc or finding the dreaded #N/A across hundreds of Excel tabs or writing down all the action items during a long call, right? When you finish a great meeting and you feel jazzed about the ideas exchanged, you want to take action, you don't want to take notes. So how do we get the machines to do more of that mundane work and free you up for driving the next evolution of your business?  

That leads into the theme of increasing employee productivity in asset management. Again, how do we automate away the “no joy” parts of the day and just double down on what's most important to drive more positive outcomes? And on top of all of that, how do we do this in a way that is compliant? Regulations vary globally. At Microsoft, we’re constantly talking to regulators about how to meet the requirements, exceed their requirements, and do everything in a way that puts privacy and security at the center. 

So many mission-critical workflows still run primarily on Excel and email. There’s still a long way to go to unlock the full potential of this new technology and modernize asset management.

The importance of data consensus and extracting intelligence at scale

VettaFi: How can firms better optimize their data so they can use it to effortlessly support sales and operations?

Marano: Getting to a place where you have a strong data foundation takes time. Is your data available? Is it timely? Is it in an analytical system? Do you have automated quality checks in place based on expected baselines? Are you aware of your blindspots? Are you aware of your conflicting and duplicative sources? Do you have people working every day to govern and derive insights from the data sitting in its raw form? How many different names do you have for the same client? How many different definitions do you have for the same concept? Is the data being used reactively, or are you using it to predict what’s going to happen next?

There’s a lot to consider, but once you get to that proactive state where data is embedded in the DNA of your workflows and you can start to predict with some compelling degree of accuracy where the business is headed, that’s when you know it’s working. At Microsoft, we call these “frontier firms” that are powered by on-demand intelligence and achieving the type of agility that generates value faster. You can feel everything start harmonizing. But it takes a ton of time and foundational investment to get there. 

VettaFi: How do you get everyone in an organization on the same page about data?  

Marano: It starts with genuine effort and intention to understand why people use data the way they do today and why they trust or don't trust it. Some people are what I would call a “super user.” They’re ahead of the curve, often ambitious people, willing to try out a new data tool or process, and give the data team feedback. They can be a champion for evolving your data and pushing the organization to embrace the power of this new technology. Those people can be amazing to work with. They'll give you the tough feedback that you need to hear to make your product better and can be the driving force between producing something good versus great.

But then, sometimes, you have others that are less intrigued and less engaged in the process. They're not willing to invest that kind of time. They will tell you to call them when it works and when it is guaranteed to have an impact, but they don’t necessarily want to be distracted with anything until then. I think, no matter where you might personally fall in this spectrum, it's really important for your data teams and product people to spend time understanding the various data personalities and incorporating all of this into the adoption strategy. We are in the midst of a massive evolution of organizational culture adapting to the new ways of doing things so it’s important we keep all of these different mindsets at the heart of what we build. Don’t trade speed for empathy.  

 

Successful financial firms have something big in common: they’ve all cracked the code for how to brand financial products. 

The right brand strategy can make the difference between thriving and failing. But there’s more to building a brand than designing an eye-catching logo or writing a clever motto. 

So, what does effective financial branding actually look like in practice? Here’s what issuers need to know to develop a financial marketing strategy that drives results.

1. Develop a complete brand strategy

A logo may catch the eye, but it won’t close deals or retain clients.

Real brand strategy goes beyond visual design. It means understanding and explaining key brand elements, such as:

  • Your unique value proposition
  • Your core values, mission, and goals
  • Your product and services
  • The experience of engaging with your financial products and services

Define what makes you different

Your value proposition is the reason why clients choose you over competitors.

In financial services, where products often appear similar on the surface, these distinct qualities are your most valuable asset.

Ask yourself: What outcomes does your product deliver that others can’t? What expertise or approach sets you apart? If you don’t have clear answers, you’ll fail to distinguish yourself from your competitors.

Articulate your purpose

A brand strategy should articulate your values, mission, and goals, which help your product emotionally connect with the right clients. 

More importantly, your values become the criteria your organization uses to make decisions. Every time you hit a publicly announced target, you reinforce your branding and reputation.

Deliver on your promises

Your products and services can’t succeed if you don’t deliver on your promises. Even the best branding falls apart if performance doesn’t match expectations. 

Successful financial services firms create their own momentum. Every positive outcome strengthens your reputation and makes future client acquisition easier.

Perfect the client experience

Outstanding branding is easily undermined by poor execution. Every stage of the customer’s journey, from inquiries to ongoing support, will either reinforce or weaken your brand promise. 

Difficulty accessing your services, poor communication, and other pain points can lead to resentment, but a great customer experience promotes retention by keeping your clients loyal.

Brand identity

Shape your brand identity so it resonates with your target audience. Your audience’s demographics, values, and preferences should drive every aspect of your brand. 

For example, a firm targeting tech entrepreneurs will communicate differently than one serving retirees. Younger investors might prioritize environmental, social, and governance (ESG) alignment and digital experiences, while more established investors often value proven track records and white-glove service.

Regulatory compliance

Remember that financial institutions are subject to unique compliance requirements, including how products and services are branded.

Accuracy, transparency, and disclosures are extremely important, and some investors will get riled by brands that make ethical lapses or get hit with penalties for failing to follow the rules. If your brand develops a bad reputation, it could require years of damage control or a rebranding strategy.

2. Maintain consistency across all marketing materials

Your logo design, color, fonts, and typography all need to work together in concert and be consistent in all of your marketing materials. 

Here’s how to create consistent brand guidelines that make your financial products and services instantly recognizable.

Visual consistency creates familiarity

When your logo appears in different sizes, your colors shift between materials, or your fonts vary from piece to piece, you’re basically starting from scratch every time. 

Consistent branding is what gives your potential clients multiple opportunities to recognize and remember your firm. Consider American Express: their simple blue box might seem unremarkable, but decades of brand consistency have made it instantly recognizable worldwide. 

Messaging and visuals should reinforce each other

Consistent messaging works the same way as consistent visuals. Investors might overlook your tagline at first, but repeated exposure builds recognition. When your visual branding and messaging align, it creates a powerful synergy.

FedEx is a perfect example. Their logo contains a subtle arrow, while their tagline “The world on time” emphasizes speed and reliability. Even their color scheme — dark purple transitioning to bright orange — suggests motion and progress. 

Imagine FedEx using American Express blue, or Amex adopting FedEx’s orange and purple. The mismatch would be jarring because each company’s visual elements support its specific brand message.

Quality matters

Once you have a striking visual identity and smart messaging, quality is what pulls it all together. 

High-resolution images, premium printing materials, and well-produced videos simply look more professional and trustworthy than low-quality alternatives. Most clients can’t articulate why one design feels more polished than another, but they definitely notice the difference.

Mobile optimization

A final point on marketing materials that’s often overlooked: Are your materials optimized for all devices?

Your website might look stunning on desktop computers, but if it’s clunky or slow on mobile devices, you’re losing prospects who discover you while browsing on their phones.

3. Invest in content marketing

Now that you have a strong, visual brand identity that communicates your brand’s value to investors, the next step is investing in content marketing. 

Start by investing in SEO. Consistently generate useful, high-quality written content that not only showcases your brand voice but also offers high-value information your target audience will want to read — and share with others.

Of course, there’s more to content marketing than blogging. Below, we cover how you can become an authoritative voice in the financial services industry via podcasts, webinars, and videos.

Podcasts

Many people prefer listening over reading. Podcasts showcase your brand’s thought leaders while creating an intimate atmosphere that makes listeners feel personally connected to the host. 

Over time, a consistent voice builds trust and reaches audiences who might never engage with your blog content. The conversational format also allows for a deeper exploration of complex financial topics.

Webinars

Financial professionals spend most of their day on computers and need continuing education credits to maintain certifications. Webinars provide valuable learning opportunities while positioning your experts as industry authorities. 

Advisors attend for the education and CE credits, where your team will have opportunities to demonstrate in-depth expertise, connect with potential clients, and build partnerships.

Videos

Both short-form and long-form videos can put your ideas in front of audiences across different platforms. Well-produced video content performs exceptionally well on social media. 

Additionally, when your team members appear as guests on earned media like news programs or industry panels, it builds credibility and brand awareness for your brand.

4. Engage in social media

Most brands maintain social media accounts, but few use them effectively. Social media gives you direct access to your target audience while amplifying your other digital marketing efforts. 

Learn from successful brand personalities

Social media is always changing, which makes it challenging to know where your brand should focus. What works for more traditional financial companies, such as Fidelity or Charles Schwab, might not work for disruptors like Robinhood or Ellevest. 

Some of the most memorable social media successes come from unexpected sources. Denny’s transformed its brand perception through witty, real-time engagement on Tumblr, transforming the restaurant from a simple late-night diner into a relatable personality customers want to interact with. Bakery chain Greggs used quick wit and brand values to turn criticism of their vegan sausage roll into positive attention that grew their audience.

Align your social media strategy and brand values

At the end of the day, social media is a way to build trust with the audience you want. 

If you can find a way to integrate your brand values into your social media campaigns and build an audience with well-executed content, your products will always reach the right people at the right moments.

5. Manage your brand perception

Brand building is an ongoing process. Once your brand is up and running, it needs continuous monitoring and management to stay effective.

Top-notch branding aims to attract new investors by establishing your firm as a thought leader in financial services. This happens through building trust in your expertise and developing lasting client relationships. 

Here are four key areas to focus on when managing your brand perception.

Track how you’re perceived

Customer surveys, online engagement metrics, and social media reactions reveal where your brand stands with investors. 

You can’t close the gap between your intended brand image and actual market perception unless you’re willing to understand that gap honestly. Regular monitoring helps you spot trends before they become problems and identify opportunities for improvement.

Listen to your clients

The best salespeople for your products and services are your customers, who share their positive experiences with their networks. Their praise and criticism provide invaluable insights into what you’re doing right and what you need to adjust. 

Make gathering this feedback a systematic process — think quarterly client satisfaction surveys or annual relationship reviews — rather than leaving it to chance encounters.

Act on feedback

Negative feedback can be difficult to hear, but it’s also one of your greatest opportunities for improvement. If launching a new podcast host dramatically decreases subscribers, analyze what the previous host did that the current person does not. 

When you receive feedback, respond with both action and acknowledgment. Investors need to see that their input drives real changes.

Audit your brand

Sometimes you need to take a moment and really look at your branding. A great but overlooked source of input is your employees, who often provide the most honest feedback about how your brand is perceived. They know your brand better than anyone, which means they can tell you whether the image you publicly project matches the reality of the company culture.

Conclusion

Strong brands think strategically, not just visually. The financial brands that stay in customers’ minds have clear values, consistent messaging, and valuable thought leadership. 

Follow the brand guidelines explored above, and your brand will be the first to come to mind when investment decisions are being made.

Looking to make your brand stand out? Partner with VettaFi and let our digital marketing experts help you grow.

TMX VettaFi expanded its global offerings through the acquisition of ETF Stream Limited (ETF Stream), which was announced today. ETF Stream is a leading media brand for European ETFs, and the acquisition will help VettaFi better serve international clients.

"The acquisition of ETF Stream represents an important step forward in our strategy to expand TMX VettaFi's digital and analytics capabilities in the U.K. and Europe," said Tom Hendrickson, president, TMX VettaFi. "Moving forward, we remain focused on opportunities to build on our offerings and expertise to strengthen our value proposition, and better serve a growing international network of clients and partners."

ETF Stream taps into European ETF ecosystem

ETF Stream’s team of journalists covers news and provides analysis regarding the ETF ecosystem. They also host events, produce educational guides, and provide data tools to advisors. The acquisition gives TMX VettaFi extra distribution reach and is the fifth big acquisition TMX VettaFi has made. Back in February, TMX VettaFi acquired the Credit Suisse Bond Indices purchased from UBS. Another recent acquisition was iNDEX Research, which TMX VettaFi acquired in October 2024. 

TMX VettaFi, which provides indexing services as well as digital distribution, thought leadership, and experiential marketing, will benefit from ETF Stream’s coverage of Europe. ETF Stream, meanwhile, joins a growing family of TMX VettaFi companies.

"We're excited to join the TMX VettaFi family," said Sam Ridley, managing director, ETF Stream. "The combination of TMX VettaFi's resources and reach, with a shared belief in fostering innovation, will accelerate our ability to deliver value and premium products to our readers, clients, and the European ETF industry."

Read more about the acquisition in the press release.

 

The Security and Exchange Commission is updating their filing access. Given the recent proliferation and anticipated surge of ETF launches, understanding the EDGAR Next update is critical for asset managers and industry insiders.  With a September 15th, 2025 deadline, issuers looking to avoid disruptions have until September 12th, 2025 to enroll to get secure login.gov credentials and navigate EDGAR Next. This update to the SEC’s filing access is a massive operational shift that issuers need to navigate sooner rather than later. Accordingly, TMX Newsfile has published a handy guide of what you need to know before the September 15th deadline. 

What EDGAR Next aims to do

According to the article, EDGAR Next seeks to:

  • Enhance security
  • Improve account management
  • Provide new CCC assignment
  • Provide optional API access

In addition to covering what steps need to be taken, the TMX Newsfile article also helps issuers looking to understand how EDGAR Next compares to the legacy EDGAR.

Crucial steps

Preparing for this transition is critical and will require issuers to create login.gov credentials and assign account administrators. Once that is completed, the next step is to enroll via the EDGAR Filer Management Dashboard. (A beta version exists for filers to peruse before enrolling.)

TMX Newsfile can also manage enrollment, CCC, admins, and confirmations for $250/year.

Stay compliant and enroll early

The last thing any filer wants is to have to navigate through issues caused by last-minute bottlenecks. With many likely to wait until late in the summer, the SEC could see backlog and filers could experience delays. The best way to avoid this issue is to handle enrollment as soon as possible, giving yourself the time and flexibility to navigate potential challenges or obstacles.

Once you are enrolled and compliant, you need to remain compliant. TMX Newsfile Filing Lead & News Specialist Martin Francisco said, “Annual confirmation and token management are part of the new reality with EDGAR Next. We are helping clients stay organized and filing-ready–without the stress.”

Read the Newsfile article here and download the EDGAR Next enrollment form here.

ETFs have become the investment wrapper of choice for millions of investors worldwide. With record-breaking inflows month after month, asset managers are eager to launch the next generation of ETF products.

Here’s the thing: ETFs aren’t without expenses, and the cost of upkeep can be high. If your ETF operations aren’t cost-efficient, even the most brilliant strategy can fall flat. 

Ready to slash your ETF administration and operation costs? These seven expert-backed strategies will show you exactly how to do it.

1. Understand every cost involved in ETF operations 

You can’t make cost-effective choices if you don’t consider every expense. 

Exchange-traded funds need money to start up and bring to market, but don’t forget about maintenance costs. Issuers creating a new ETF via a mutual-fund conversion must navigate several expenses.

The most important thing that makes an ETF function is how new shares are created and existing shares are redeemed. Creation starts with buying securities, then bundling them into the exchange-traded fund structure. Think of an ETF’s redemption mechanism as a mirror image, with all underlying assets unwrapped into separate components.

Authorized participants, which handle the making of creation units, come with their own price tag. Yet there are several other expenses that go into getting an ETF on its feet. These include:

  • Legal counsel and compliance
  • Fund managers (ETF sponsors)
  • Fund administration
  • Marketers
  • Sales teams
  • Index service partnerships
  • Fees

  • Potential penalties (if noncompliant)

Don’t forget the costs of distribution, including dividends, interest, capital gains, and return of capital. Managing portfolio holdings and their distributions requires careful coordination with brokerage partners to ensure cost-effective execution. If the ETF strategy pivots or the fund needs to change its structure, that also comes with an administrative price tag. 

If you understand every cost and build a cost-efficient exchange-traded fund, the fund expense ratio can be lower. This, in turn, may help you attract more investors.

Many investors are drawn to the benefits of ETFs, including their easy-to-trade, tax-efficient wrapper structure. A lower expense ratio can help sweeten an already sweet deal for investors.

2. Create a powerful pricing method

Creating a powerful pricing method for your ETF offers several benefits. That’s because improved transparency leads to greater investor confidence. 

Whether you’re working with an actively managed ETF or a passive fund, portfolio managers need investors to understand how investment decisions are made. If investors feel they can look under the hood to see how the ETF is working and why, they’ll be more likely to help the ETF meet its investment objectives. Improved liquidity and higher trading volume will also make it easier for investors to buy and sell shares.

It’s also critical for market participants to engage in arbitrage activity. You want your ETF share price to align with the value of its underlying securities, which could differ from the NAV due to premiums or discounts. 

Finally, both passive and active management strategies need ways to ensure the creation and redemption processes are as cost-efficient as possible.

3. Optimize your risk management strategy

No battle plan survives first contact with the enemy, and no investment strategy survives first contact with the market. Issuers must identify potential risks early in order to reduce losses due to market conditions beyond their control. 

Optimize your risk management strategy by:

  • Making sure your ETF is operationally efficient. Inefficiency can result in lost money and additional expenses.
  • Preventing administrative mistakes. Fixing administrative errors can be costly. Reducing operational risks ensures issuers sidestep these problems and keep their overhead (and expense ratio) low.
  • Reducing operational costs. Ask yourself: Are there hidden efficiencies you aren’t capitalizing on? Are time and resources being burned at any point in the process? Don’t overlook opportunities to optimize how your ETF functions.
  • Tracking the right index. Make sure you’re tracking the right underlying index. Or, for an active ETF, that your investment management approach accounts for market volatility. Your ETF’s market price and historical returns will be pivotal for convincing investors to put money into your product. 

4. Comply with all regulatory and reporting requirements

A strong compliance strategy can save issuers from countless headaches. In the ETF market, complying with Securities and Exchange Commission (SEC) regulations is a day-to-day task. 

This applies to different jurisdictions and stock exchanges where your ETF products may be listed. You must disclose your ETF’s market price and Net Asset Value (NAV) at the end of each trading day.

The SEC could request or require many other disclosures, including detailed prospectus information and holdings data. While there are funds with varying degrees of transparency, ETFs must disclose detailed information about their portfolio holdings so investors and the SEC are aware of their daily operations.

These disclosures can seem onerous, but fines for non-compliance and failure to disclose can be extremely costly. Throw in the cost of lawyers and the reputational damages for failing to comply, and the risks quickly add up.

The reputational damage of failing to meet compliance obligations can be particularly devastating. A fast, busy newscycle can seem like a get-out-of-jail-free card for asset managers, but investors will remember these missteps and lose faith.

5. Find the right ETF index service provider

Another way to keep your costs low is to find the right ETF index service provider. 

Index service providers handle the complicated fund administration tasks that go into keeping an ETF operational and compliant.

When an ETF index service provider offers end-to-end capabilities, they can:

  • Ensure you stay compliant with all regulatory and reporting requirements.
  • Prevent market manipulation of your fund.
  • Identify and address costly potential conflicts.

Index providers are a low-cost solution compared to building these capabilities in house, but are still an overhead or benchmarking expense. 

A responsive  index service provider will  quickly get you the data you need to build the product you want. By contrast, a slow index service provider will lead you to spend more time in development, giving you fewer opportunities to improve your product before going to market.

6. Use behavioral data to find your ideal investors 

You can build the most operationally efficient investment vehicle in the world, but without the right investors, it will go nowhere fast.

Digital marketing matters for your ETF because AUM growth creates powerful economies of scale. Whether you’re launching diversified ETF portfolios across asset classes or targeting niche strategies, more assets mean lower per-unit costs and better margins.

The challenge is to find investors who want what you’re offering. That’s where behavioral data becomes your secret weapon.

ETF index service providers like VettaFi offer access to investor behavioral data and lead subscription services that reveal exactly what potential investors are researching, reading, and considering. Instead of guessing what investors want, you get clear insights into what they’re actually looking for.

Behavioral data shows you which issuers and strategies investors are actively exploring. Instead of your team wasting time on cold calls, they can connect with investors who are ready to buy. The result is shorter sales cycles, higher conversion rates, and steady inflows.

7. Stay ahead of ETF administration trends

The ETF ecosystem is in a constant state of flux, with active ETFs and passive strategies always evolving. New tools and constantly changing regulations create a steady stream of opportunities. Successful ETF issuers will be on top of the latest regulations, tech advancements, and shifting market trends. 

Bringing any ETF investment to market is a challenging endeavor, but efficient operations and exceptional partners can go a long way in helping your ETF achieve its goals.

Choosing an index service provider that can help you stay ahead of administration trends and regulatory compliance will make your ETF operations, marketing, distribution, and maintenance more cost-efficient. More cost efficiency will mean lower expense ratios, more investor interest, and better results.

Start small, scale smart

These seven strategies for cost-efficient ETF operations can take you far, but remember that even the most successful ETF issuers don’t try to do everything at once. 

Start with understanding your true costs, building fail-proof compliance processes, and choosing partners who can scale with you. This includes cutting-edge services like VettaFi’s lead subscriptions, which can help you make your marketing strategy as efficient as your operations.

Once you’ve created a solid foundation for your ETF administration, everything else becomes easier. The market rewards efficiency, and the ETF issuers with the most cost-efficient operations will have the flexibility to adapt no matter what the market throws their way.

 

In this edition, VettaFi sits down with Emily Pachuta, formerly of Invesco. The role of the chief marketing office (CMO) has evolved as companies digitally transform, embrace the power of brand, and lean into data-driven behavioral insights to drive client growth and satisfaction. No longer is the role merely “colors and fonts” or “clever copy.” Today, a CMO sits at the intersection of most functions within an enterprise, with responsibilities that span pipe, business development, sales automation, and even community-building. As a result, successful CMOs must embrace change while remaining close to both customer and product. 

Learn how CMOs to discuss driving success inside and outside their organizations, sharing perspectives on career, outlook, and motivation. 

In her former role as chief marketing and analytics officer, Pachuta set the firm’s overall advanced analytics and marketing strategy in order to accelerate business growth and strengthen Invesco’s reputation with U.S. and Canadian wealth management intermediary, institutional, and individual investor clients. Pachuta also served as the executive leader on the firm’s global distribution data, global marketing, and global digital priorities. She is a frequent media spokesperson and conference speaker about client experience, digital modernization, and the intersection of data and creativity. 

[Editor’s note: At the time of the interview, Pachuta was employed at Invesco, but she has since left.]

Jobs and Careers — From First Job to Dream Job 

VettaFi: I like talking about jobs and careers because we all spend a lot of time at our jobs or building careers, and it’s typically the root of our life satisfaction or dissonance. What do you think is the difference between a job and a career?  

Emily Pachuta, former CMO, Invesco: For me, a job is something you have to do. A career is something that you want to build and grow. A job feels more transactional in nature: money for work done. A career thrives and brings purpose, beyond the monetary.  

VettaFi: I like that. Tell me about your first job.  

Pachuta: During college summers, I worked for a law firm as a temporary word processor and assistant who would answer phones and file papers. The pay was decent, and the lawyers were extremely polite, so it was a good job. Those skills came in handy when I went to get my Master’s in film production at NYU; I put myself through the program by working overnight and weekend shifts at a NYC law firm.  

VettaFi: Do you have a dream job?  

Pachuta: That’s a tough question, because I really love the career that I’ve been able to continue to build at Invesco that spans data, analytics, and marketing disciplines. However, I am a huge hockey fan, so my dream job would be to work for the Washington Capitals, or for the NHL, to help them grow their fanbase and to make hockey fun and accessible for everyone.

VettaFi: How did you get into the marketing world?  

Pachuta: My first job in marketing was at Merrill Lynch. I had taken time off when my children were born, and when my son was two, I wanted to do something part-time. A woman from my children’s preschool worked at Merrill Lynch, and they were looking for someone to be a part-time writer and editor. I had no professional background in financial services, but I did well on the assessments, and I was hired. I still think that it was kismet — meant to be.   

It was such an exciting time, because Merrill Lynch was transforming their business model away from “Wall Street to Main Street” and toward wealth management. A new CMO — who is a mentor to this day — really shook things up and loved change. In the seven years that I was there, I experienced almost every aspect of marketing and had the opportunity to learn from amazing professionals, as well as from advisors and their clients. I was hooked on the discipline of marketing, but also the purpose and impact that wealth management and asset management can have on people’s families and lives.

VettaFi: Mentoring in marketing is particularly unique, because of how fast the space evolves. Who was the mentor who got you to where you are today? 

Pachuta: Paula Polito, who was the CMO at Merrill Lynch while I was there. She had the single greatest impact on my career; I would not be where I am today, had not been for the potential that she saw in me and the opportunities she gave me at both Merrill Lynch and later at UBS.  

[Personally], I find it very rewarding to mentor, both formally and informally. Formally, I am mentoring two people now — one at Invesco who is not in marketing, and one outside of Invesco who is a marketer. I learn so much from the conversations with these wonderful professionals.   

Successful Marketing Highlights the Why and the How  

VettaFi: What’s something you learned from an earlier job you had outside of marketing that impacts your abilities as a marketer or your approach to your current job?   

Pachuta: Finding the story and telling it in an emotional and memorable way is a critical skill for marketers. In film school, I gravitated toward making documentaries — I shot my thesis film in Moscow — because I loved how you could have an idea for the film, but, in the end, you needed to be still. You needed to watch and listen until the real story would reveal itself.   

Asset management products can be complex, and they aren’t tangible objects like consumer products. I think we tend to focus a lot on “what” the products are. But successful asset management marketing keys in on the purpose products they serve: the “why” and “how” you use them to reach human-centric goals.   

VettaFi: Agreed. Getting to the “why” and “how” is like Marketing 101 these days, but it wasn’t always that way. How was the definition of marketing different when you first entered the field, versus how you as a CMO define it today?   

Pachuta: When I first entered the field, “marketing” was either advertising or sales enablement collateral. It was also very product-centric. However, in other industries, marketing was more evolved, so I’ve always looked outside industry to anticipate where the puck is going in terms of impact that marketing can have. 

There was also a view that “B2B” marketing was different than “B2C,” which struck me as a bit odd. People are at the center of “B2B,” [which is] no different than “B2C.”   

Today, I define marketing as making an emotional connection between a brand and its customers. In asset management, that emotional connection is all about empowering confident financial decision-making… whether you are an institutional investor, financial intermediary, or individual investor. To do that, you really need to understand your client using research, data, and analytics, then take that knowledge to deliver personalized experiences that meet your client where they are. There’s still too much focus on getting clients or customers to come to the brand and not enough focus on meeting customers where they are.  

Pets and Pet Peeves   

VettaFi: I find that a bit frustrating. It’s a pet peeve of mine. It tells me brands are not truly focused on the customer. Speaking of, let’s talk about pets and pet peeves. Do you have pets?   

Pachuta: I have two French bulldogs. Our first Frenchie is four years old, and his name is Ovi. He was born the same year that the Washington Capitals won the Stanley Cup, and he’s named for Alexander Ovechkin, who is the captain of the team. Our second Frenchie is Ovi’s biological son, and his name is Gretzky for Wayne Gretzky. They have two speeds — crazy and cuddling — and we can’t imagine our home without them.  

VettaFi: Sounds like my kids. What about your pet peeves? What annoys you the most in the workplace?   

Pachuta: It can be annoying when people hold views that aren’t substantiated by data at all. Data may even refute the view, but it’s become a hard-held “truth.” Also, workplaces can make getting work done far more complex than it needs to be, so we should always be asking, “How can we move faster?”

VettaFi: I can relate to that. Old habits and ways of thinking can be hard to change. However, businesses that base decisions on data, not just instincts or experience, are 19 times more likely to be profitable. Thankfully, I’ve yet to meet anyone who does not want to be 19 times more profitable!  

Leadership    

VettaFi: What daily habits or weekly routines do you have that keep you sharp as a leader and evolving as a marketer?  

Pachuta: I’m always looking to learn from those with more experience or different points of view. I try to be conscious of where I have opportunities to improve and focus on those areas. I make time to join sessions with CMOs and leaders involved in data and analytics outside of industry. I used to think that it was a luxury, and these engagements would be the first thing to go when there was a calendar conflict, but I learn so much from these experiences that I’ve been prioritizing my participation in these conversations and counsels.  

VettaFi: What one thing has played the greatest role in shaping your leadership style?  

Pachuta: The book “Team of Teams” by General Stanley McChrystal made me think long and hard about the insufficiency of hierarchical leadership and what the role of the leader really is. Concurrent to my exposure to the concepts in “Team of Teams,” I also had a wonderful executive coach, [with whom] I learned how purposeful you must be if you are going to be the leader you aspire to be. My goal is to be a servant leader who focuses on empowering my team and enabling them to be their best selves. I assess to ensure that my intentions match my actions. For example, I will look back on my calendar every quarter to assess if I am spending most of my time in ways that empower my team and enable them to be their best selves.  

VettaFi: We just got back from Exchange, where our attendees volunteered 130+ hours and we contributed over $50,000 to the Komen Foundation, Surfrider Foundation, and Junior Achievement. Tell me about your volunteerism. How do you give back? 

Pachuta: I’ve been involved in Rock the Street Wall Street, which is a financial and investment literacy program for high school girls. I volunteer at the Stuyvesant High School program location in NYC. I’m also a board member of Sapere Aude Consortium, an organization the provides research-based internships to first-generation rising college sophomores and juniors. When I spend time with the young women in both programs, I feel quite confident that our society’s future is in good hands.  

I support these two organizations because I am passionate about seeing the wealth inequality gap narrow, which can happen with greater financial and investment literacy. I would like to see greater diversity in our industry, and that will only happen if we address the challenge across multiple dimensions, one of which is helping students who might never have thought about a career in finance consider one.  

Digital Transformation 

VettaFi: Let’s switch gears and talk about “digital transformation.” Without using the words “digital” or “transformation,” define what this term means.    

Pachuta: Making the ways that we connect with each other and our customers faster, more intuitive, and more personalized.  

VettaFi: What is something nobody is thinking about in terms of digital transformation but you are keenly aware of?   

Pachuta: I am aware that digital transformations are less about disruption for disruption’s sake and more about finding new ways to connect in faster, more intuitive, and more personalized ways. Web 3.0 and Metaverse are obvious examples of that.

VettaFi: Thinking one to five years out, tell me about your predictions for marketing and marketers? What’s coming next? How do we prepare?  

Pachuta: My prediction — and I think that this will be true in the one- to five-year window — is that AI will play a much larger role in marketing than it does today, whether that’s in content creation or the increasing sophistication of data analytics. There will absolutely be a role for people, and I feel that people who embrace this will be better able to focus on their differentiated value. Companies who embrace this will grow faster/more profitably and have deeper client loyalty, because they can anticipate and meet needs faster. [Author note: Pachuta’s comments were given before the ChatGPT hype train spun up.] 

VettaFi: What’s one headline that you expect to read in five years?  

Pachuta: “Alexander Ovechkin scores 1,000th goal.” Just joking. (Although it’s possible!)  

The headline that I would like to read is “50% of Fortune 500 CEOs Are Women.”  

VettaFi: I would like to read that too. Before I let you go, can you share with us an album, book, movie, TV series, or other creative work that brings you joy right now? 

Pachuta: Experiencing creativity live, after not being able to for so long, is bringing me joy. I’m consciously building some kind of performance into my life at least once a month. I love the spontaneity of live performance — anything can happen, no matter how much preparation or rehearsal went into it, but the performers keep going and maybe even discover something magical in the process. And isn’t that just a great metaphor for life — people plan and G*d laughs — but you might just find something new and magical along the way.

To stay connected to Emily, you can follow her on LinkedIn. 

This article was originally published April 10th, 2023 on ETF Trends.

Distribution leaders and campaign managers for asset managers face an array of challenges today as they look to get their products in front of the right customers. Though data has tremendous potential to be a guiding force for a successful campaign, it is often fragmented and siloed. Additionally, most firms lack the resources to properly wield data. They either have an abundance of data and are unsure how to apply it, or they lack the time or resources to deeply analyze it.

Fortunately, there is a way forward. The key to making data-led marketing campaign decisions is to triangulate insights from three key data points - unlock the guide below to learn more.

 

When it comes to attracting investors to your ETF, marketing is everything. You’ll need a clever marketing strategy to draw their attention and boost your AUM. 

Of course, growing your ETF AUM means getting your product in front of the right investors who need it, whether you’re an established ETF provider, an MLP ETF, or launching a new ETF for the first time. Once you grab their attention, you’ll need to be quick and efficient about how you communicate your product’s benefits.

Use these seven expert ETF marketing tips — from finding your product’s niche to establishing PR opportunities and working with micro-influencers — to help you attract new investors.

1. Start with a custom ETF marketing plan

You’ll need a custom digital marketing plan to generate buzz and raise brand awareness for your exchange-traded fund. This means leaning into digital ads in all the right places where investors interested in your product like to spend time. 

Define your audience

When you market your ETF online, start by asking yourself, “Who am I marketing this to?”

For example, if you have a product that focuses on commodities, you need to get your product in front of investors who are interested in alternatives. An investor who holds a clean 60/40 portfolio and sticks to the world of equities and fixed income isn’t going to be interested in a commodities product. 

Your index service provider can be a valuable partner for finding new investor leads, especially if they have access to data that charts investor interest.

Use real-time data to customize your marketing plan 

Most investors research online. As investors become more aware of your brand and product, a custom digital marketing campaign can help you reach them faster and shorten your sales cycle. 

Don’t let your sales team waste time on cold leads. By targeting the audience that wants your product, you can discover better market opportunities and dramatically improve your ETF’s AUM. 

A big part of a customized digital marketing plan is making it, well, customized. Use real-time data insights and analytics to track your ideal investors. VettaFi’s lead subscription tool does just that, connecting issuers with investors whose digital behavior suggests a match.

2. Find your niche

Your product development should start with a fundamental question: What specific investment strategy problem does this ETF solve?

In other words, what’s your niche?

The answer comes down to your ETF’s unique value proposition, whether you’re targeting retail investors, institutional clients, or both. That could be anything from enhanced tax efficiency to superior diversification, exceptional liquidity, or protection against volatility.

Other ETF niches might include:

The most successful issuers identify real market voids, or combinations of attributes unavailable in existing products. 

By examining where current offerings fall short and understanding the regulatory landscape, you can find a niche for your ETF and offer meaningful solutions to your investors beyond what mutual funds can offer.

3. Use conferences and events to find sponsors

Event sponsorships are one of the most exciting ways to accelerate your ETF’s growth, enhancing brand visibility and creating meaningful connections. The most effective event marketing comes down to two areas: industry conferences and targeted live events.

Industry conferences

Financial conferences like Exchange bring together the entire financial services ecosystem, creating ideal conditions for:

Live events

Conferences aren’t the only live events that can bolster your ETF’s marketing plan.

These other face-to-face interactions deliver big benefits that other marketing strategies can’t replace:

When conferences and other live events are part of your ETF marketing strategy, they reinforce your position in the marketplace. "Sponsoring live events offers an unparalleled opportunity to put your company name and ideas directly before your target audience," said TMX VettaFi Head of Marketing Sarah Alexander. "Live events, like our Exchange conference, can foster deep engagement that digital channels cannot replicate. They also serve as an excellent medium through which to conduct business and build relationships." 

Looking for sponsorship opportunities? Talk to VettaFi about how our event sponsorship services can help you source sales opportunities, amplify your brand, and grow your AUM.

4. Create an ETF comparison tool

Adding an interactive comparison tool to your website is the best way to instantly showcase your ETF’s competitive advantages while giving your potential investors real value that builds trust:

Design for decision-making impact

Implement strategic competitive positioning

Leverage the tool for lead generation

Remember that a well-crafted comparison tool should guide potential investors toward understanding your ETF’s value proposition through interactive discovery, not passive marketing claims.

5. Look for PR opportunities

Say yes to any media or PR opportunity you can. A strong public relations strategy can expand your visibility and reach while building credibility.

Here’s how to make the most of every PR opportunity.

Podcast interviews

Accept interviews on financial podcasts regardless of audience size. Even niche shows can reach the right investors and influencers who might not encounter your ETF otherwise. Your outreach strategy should target both industry-leading and specialized podcasts.

Thought leadership

Establish your team’s authority by publishing thought leadership content, such as:

Media relationships

Develop a media contact database and regular outreach schedule. When something happens in the market that aligns with your ETF’s strategy, reach out to financial journalists with concise, insightful commentary they can quote.

Measuring your PR strategy’s impact

Track your publicity’s performance by studying how it drives your ETF’s growth.  By examining the right key performance indicators (KPIs), you'll quickly identify which media activities actually convert interest into AUM, so you can double down on what works and eliminate what doesn't.

Here are some tips for analyzing your PR performance data:

Install tracking

Use dedicated tracking codes for each PR initiative to measure website traffic, content downloads, and subsequent investor engagement.

Connect activities to results

Analyze the correlation between PR activities and AUM flows by implementing attribution modeling that captures:

Keep improving your approach

Review performance quarterly to reallocate resources toward the PR activities delivering the strongest ROI for your specific ETF.

6. Establish micro-influencer relationships

Micro-influencers who love your product are some of the most cost-effective messengers you can find. They speak directly to people who could be your next investors. 

Here’s a quick overview of the different types of micro-influencers and how they can contribute to your marketing strategy.

Types of micro-influencers

There are many different kinds of micro-influencers in the finance world:

Financial educators who explain products to beginners

These can be social media personalities like Kyla Scanlon, who helps her Gen Z audience understand the world of finance or popular established bloggers like Michael Kitces. 

Market analysts with dedicated following

Many influencers are analysts who have built up their own audiences over time. People like VettaFi Voice Todd Rosenbluth or Bloomberg analyst Eric Balchunas are great examples.

Niche investment specialists who align with your ETF 

Niche investment specialists are influencers who cover a narrow slice of the market but tend to attract passionate followers worth tapping into. This is especially true if your product focus is in alignment.

How micro-influencers help your ETF marketing efforts

Micro-influencers are often exceptionally skilled at explaining complex financial products, making advanced concepts more digestible to a broad or beginner audience. 

Here are the advantages:

Connect with investors who prefer influencers over stock prospectuses

While plenty of investors love to pore over a prospectus, others may lose interest when they see one. Those are the people who are most likely to pay attention when their favorite influencer’s latest podcast episode goes live. 

Get mentioned more than once 

Another advantage? Once a micro-influencer knows your ETF’s name, they can deploy it at any time. They can also help you grow momentum by highlighting milestones in your ETF assets under management.

Boost your credibility

Finally, third-party credibility is hard to beat. While personal thought leadership may be considered biased, third-party advocates have no reason to plug your product if they don’t genuinely believe in it. That credibility will go a long way to helping your product establish itself.

7. Optimize your ETF’s search visibility

When people search online for ETFs like yours, you need them to be able to find you. The ETF industry is crowded and it’s not always easy to stand out. Thankfully, search engine optimization (SEO) ensures your ETF is discovered when the ideal investors are hunting for their next investment opportunity.

By using SEO to make your ETF more discoverable, your product will appear when investors are actively seeking the type of solutions it provides. In other words, top-notch SEO practices turn search engines and financial platforms into your most efficient marketing and distribution channels.

Discover the best ETF marketing tactics

An ETF is a marathon, not a sprint. If you want investors to invest in your product, you need to invest in the right marketing tactics.

VettaFi can help support your product throughout its lifecycle with competitive marketing materials and other specialized services that offer deep insights for engagement and growth. 

Contact us today to learn how we can help you grow.

 

Exchange-traded funds (ETFs) have seen a meteoric rise in popularity. In 2003, there were roughly 123 listed ETFs in the United States. Today, there are nearly 4,000. 

Now that investors have a better understanding of the wrapper’s benefits, the market is poised to grow. Starting your own ETF,  which can be a valuable asset for portfolio management, is more common than ever.

If you want to successfully launch your first ETF, start by knowing the best practices. Below, we’ve written the ultimate guide to how to launch an ETF — from analyzing the market and choosing the right partners to regulatory compliance and digital marketing strategies.

What is an ETF, and why should I launch one?

As of 2024, there are more than $10 trillion in assets under ETF management, with record net inflows north of $1.1 trillion. 

If that’s not enough to convince you to launch your own ETF, here’s a little more about why ETFs are becoming such a popular choice for investors.

What is an ETF?

An exchange-traded fund (ETF) is an investment vehicle that pools investors’ money to buy a collection of securities, similar to a mutual fund, but trades on stock exchanges throughout the day like individual stocks. 

ETFs typically offer lower expense ratios than mutual funds, greater tax efficiency through their unique creation/redemption process, and enhanced liquidity for investors who want to buy or sell shares quickly at market prices.

They can track various asset classes including stocks, bonds, commodities, or currencies, and may follow passive strategies (tracking an index) or active approaches (managed by investment professionals seeking to outperform). 

Their transparent nature allows investors to see underlying holdings daily, while their flexible trading options include limit orders, stop-loss orders, and margin trading – tools unavailable with traditional mutual funds. This combination of diversification, cost-effectiveness, and trading flexibility has fueled their explosive growth over the past two decades.

Why should I launch an ETF?

Launching an ETF can be an outstanding opportunity for asset managers and investment firms. The ETF structure offers significant advantages, including operational efficiencies, potential for asset growth, and the ability to reach new investor segments that might not access your strategies through traditional vehicles.

One of the key attractions for investors is the liquidity these products offer, as ETF shares can be bought and sold throughout the trading day on a stock exchange, unlike mutual funds, which only trade once daily. Mutual funds still make up the lion's share of the managed fund industry, but ETFs now represent 33%, indicating substantial room for future growth.

In the U.S., 45% of all investors have ETFs in their investment portfolios — a number that keeps growing despite market uncertainty. 2024 saw the launch of 1,485 new ETFs, and 230 ETF products launched in Q1 of 2025. 

The rapid growth of ETFs is proof of the market’s receptiveness to new offerings and innovative products.

How to create a strategy for your ETF launch

Entering the ETF marketplace requires careful planning and strategic partnerships to stand out among the thousands of available options. Launching a successful ETF demands not only a compelling investment idea but also expertise in index selection, governance structure, and targeted distribution strategies.

Start with an idea

If you want to launch an ETF, you need to have a product in mind. That means you need an investment thesis and a plan for what kinds of exposures the fund will include. 

Find an index partner

Once you’ve settled on an idea you’re happy with, you need to find an index for your ETF to track if you have a passive fund, or to act as a benchmark if you have an active fund. You’ll want an index partner who can quickly backtest, support your ideas, and help iterate on the fund design, all of which will help you find the angle you need to set your ETF apart from the competition. 


Develop a distribution strategy

Next, consider how your ETF will govern and interact with its shareholders. From there, figure out a distribution strategy. Ask yourself:

Depending on the size of the issuer, distribution strategies will vary greatly. The biggest asset managers can leverage name recognition to some extent, but smaller firms will have to think creatively about how to get the word out about the fund.

What to think about when developing your ETF

Once you know your strategy, the real challenge begins. 

The art of developing an ETF is really about choosing the ETF structure that offers the best possible benefits for your fund’s goals. 

Types of ETF structures

There are several types of ETF structures:

Selecting the right ETF structure is a major decision that will impact everything from operational costs to tax implications for your investors. 

When you eventually submit your ETF prospectus to regulators, you'll need to clearly outline which structure you’ve chosen and why it aligns with your investment goals.

ETF transparency

You can also choose the degree of transparency your ETF will have, a decision with major implications for your investor relations and competitive positioning. 

Fully transparent ETFs

A fully transparent ETF is essentially an open book. Investors and competitors can see what the fund holds daily, including exact securities and weightings, which builds trust but potentially exposes proprietary strategies. 

Transparent ETFs are more traditional and remain the industry standard, especially for passive index-tracking products where portfolio concealment offers limited advantages. They usually track a specific benchmark index, making it easy for investors to understand the fund’s holdings and performance targets.

Semi-transparent ETFs

Many investors enjoy that transparency, but some fund managers worry about competition stealing ideas or front-running trades. That’s where the semi-transparent ETF comes into play.

Semi-transparent ETFs reveal some — but not all — of what is held, providing a certain amount of protection. These newer structures, which were only recently approved by the Securities and Exchange Commission (SEC), disclose holdings less frequently (typically quarterly) or use proxy portfolios that closely track performance while masking exact compositions. 

This makes them especially useful for managers with unique investment strategies, or in markets where revealing positions could make buying and selling more difficult and expensive.

Converting a mutual fund to an ETF

If you already have a mutual fund, you can simply convert it. This will give you all the advantages of the wrapper without having to build a new ETF from the ground up.

The conversion process requires approval from the SEC and careful planning for current investors. Taxes are very important to consider, as properly set up conversions can be tax-free and keep the fund's performance history intact. 

Since the first mutual fund to ETF conversion in 2021, many investment companies have followed this path, bringing billions in assets to the ETF structure. Investment managers should know that the process typically takes 6-12 months and may require hiring specialized lawyers who know how to handle the specific regulations for these transactions.

Other considerations when launching an ETF

There are many other factors to consider as you develop your ETF. ETFs hold groups of investments, so picking what goes into your ETF is important. 

You can include any type of asset class or mix of investments in your ETF. Some ETFs contain both stocks and bonds, while others focus on just stocks.

Know your market capitalization size

Remember to think about your market capitalization, or the size of companies in your fund. 

Is your ETF focused on big companies, small companies, or medium-sized ones? Your fund could also include a mix of different company sizes. 

This decision will affect both your fund's risk profile and growth potential, as larger companies typically offer more stability while smaller ones may provide greater opportunities for growth.

Consider your sectors and markets

Next, consider sectors and market segments. A fund that focuses on industrials is going to be a lot different than a commodities fund or a fund that focuses on high-yield fixed income. 

There is a world of opportunities and potential combinations. Finding the right way to articulate your investment thesis through how you choose market capitalization, sector allocation, and other essentials will be how your ETF differentiates itself.

Determine your expense ratio

The higher your expense ratio, the more your investors will pay you per share they own. However, a high expense ratio can be off-putting to investors, so you need to determine an expense ratio that makes sense given your positioning.

Related: Why most MLP ETFs own less than 25% MLPs

Finding the right partners for your ETF

It takes a village to launch an ETF. In other words, you’ll need several partners to not only get it up and running, but also maintain it.

Your ETF partners should include:

Be aware that when choosing an index partner, you need someone who can help you come to market as quickly as possible. A responsive index partner can backtest rapidly, helping you discard ideas that aren’t working so you can succeed faster. “"The majority of ETFs will fail to garner over $250 in AUM,” said VettaFi’s Chief Product Officer Brian Coco. “This is why having an index partner that is invested in product success and that can help with marketing is important. You need to give yourself the best possible chance of success."

It goes without saying that you should always vet your potential partners. As an ETF sponsor, your reputation will be tied to the performance and reliability of these service providers. Ensure their goals align with your own investment goals so they can help you bring your ETF investment strategy to life.

ETF regulatory requirements and filing

Prospective ETF managers must submit a fund plan to the SEC. You can find the necessary documents and forms on the SEC website, but make sure you consult your legal team before submitting anything.

SEC approval is required before you can launch an ETF. Whether you're launching an actively or passively managed fund, the SEC must still receive and process your paperwork. Typically, the approval process takes four to six months or longer.

Once the SEC approves your ETF launch, you will still be responsible for following all SEC rules. These include, but are not limited to:

Keep in mind that the SEC occasionally updates requirements to address market changes and investor protection concerns. Working with service providers who specialize in ETF compliance can help you reduce your operational burden and avoid costly mistakes.

Marketing, distributing, and operating your new ETF

Making your new ETF stand out from the competition can be a daunting task. If your fund does something similar to what another fund has already been doing, you’ll need to find a unique angle to ensure your ETF captures the attention of investors. 

Being first to market with an idea is powerful, but that doesn’t mean there won’t be competition. Stand out by outperforming or having a lower expense ratio. 

Digital marketing

Digital marketing and distribution are now the norm, and most potential investors research new ETFs online. Ensure your digital presence clearly communicates how your fund provides diversification benefits within an ETF portfolio. 

Investor behavioral data can help you find high-quality leads and get your product in front of them at the perfect time. 

Tethering your product to current market events and news is another excellent way to move the needle and set your product apart from the rest. 

Don’t forget that successful products tend to use a full-funnel marketing approach. They gradually build top-of-funnel awareness, leveraging data and analytics to move lower-funnel prospects toward conversion. This is especially important for active ETFs that need to communicate their value proposition beyond simply tracking an index.

Operational costs

Determine how much your operational costs will be, and how much seed capital is necessary to meet those costs. 

Finally, make sure you have a plan for the first year of operation. Draft a break-even analysis, as well as growth projections.

Now that you know how to launch an ETF

Launching an ETF is a huge undertaking. But with the right partners and careful planning, you can bring your unique investment idea to the market and illuminate a previously invisible opportunity for investors. 

Have a killer idea for an ETF but need the right tools to get it in front of investors? Reach out to VettaFi now.

Picking the right index service provider can make or break your new ETF product. 

With nearly 4,000 ETFs competing for shelf space in the United States alone, in today's competitive ETF ecosystem, issuers need an ETF services partner as invested in the asset growth of the product as they are that can help them design and maintain their index as an index provider.

ETF issuers have different needs, but some approaches lead to better outcomes than others. You need to know what works to avoid the common pitfalls that can derail new ETF launches. 

Here’s everything you need to know to find the right ETF index service provider, from what type of evaluation criteria to use to how to spot red flags before you commit.

What ETF index service providers do

Traditionally, ETF index service providers calculate and maintain market indices for exchange-traded products. 

These indices can be licensed and are frequently used for two purposes - benchmarking to measure investment performance, or for a rules-based investable product to track. A good index partner will accurately track corporate actions, including mergers, stock splits, and dividend payouts in real time and adjust the underlying basket accordingly. 

In recent years, index providers have worked with ETF issuers to create unique products that offer specific exposures and index methodologies. Creating custom indexes has been one way for issuers to differentiate from their competitors, many of whom are likely licensing legacy-type indices (e.g., beta, Value/Growth styles, etc.) from “the big four” index vendors: Bloomberg, FTSE Russell, MSCI, and SPDJI.

A good index partner can reflect a product view through a unique methodology used to select specific securities. Ideally, they can also find creative approaches to complicated problems and think outside the box. They must be organized and efficient enough to competently track, maintain, rebalance, and comply with regulatory guidelines while working with authorized participants. 

Additionally, a good index partner provides transparency about their process and is responsive and communicative with the ETF issuer. Because issuers must manage and operate the fund, they need an index partner who can quietly and effectively handle the indexing, which includes methodology development and calculations.

How does an ETF index service provider influence performance?

ETF index service providers can impact many performance markers for an ETF. Notably, they are responsible for any tracking errors that arise through index design or turnover. 

Their services complement fund administration efforts, and their chosen rebalancing frequency and reconstitution schedules can impact an ETF’s net asset value calculations and bottom line. The methodologies used to create the investment universe of a given ETF index can also impact ETF shares’ overall performance, including total cost of ownership, second market liquidity, and trading costs. 

A fund’s performance is ultimately on the management team and any portfolio management decisions, but having a capable index partner can prevent unforced errors and strengthen results. Many index partnerships begin and end at an agreement to license an index, but a good partner can go further and help throughout the full lifecycle of the product.

Key criteria when choosing an ETF index service provider 

Before choosing an ETF index service provider, investment management firms should consider the following: 

  • What is the index provider delivering to the issuer for their licensing fees and pricing? 

  • What data, analytics tools, and complementary fund services are offered by the ETF index service provider?

Backtests are a critical component of building a smart product that innovates for investors. Seeing how a product would have performed in specific circumstances can let fund managers understand and anticipate how investors will deploy their products, and where there could be opportunities or challenges given market conditions. 

Many index service providers will need time to turn around a backtest. A faster partner can help fund managers iterate and evolve their product ideas. "The Index Product development cycle is iterative by nature,” VettaFi’s Brian Coco said.  “Achieving success requires failing faster." Quick turnaround times on backtests can allow issuers to test and discard ideas rapidly as they work toward meeting product goals.

Finally, when choosing the right index partner, ensure that you:

  • Use methodologies that are transparent, well documented, and support required disclosures.

  • Know the structure of the index governance and committee independence. 

  • Understand the terms of any licensing agreements.

Questions to ask potential ETF index partners

There’s a lot to consider when choosing a service provider.

Asset managers should ask potential partners these seven questions to help them decide if the partnership will be a great fit.

What unique data sets so you use? 

If you want to build a product that stands out, having access to unique data sets can help make that happen. Index providers with unique data sets can help issuers build products they can’t build on their own.

How can your index help me improve my investment offerings and meet my investment objectives? 

Listening to an index partner explain why they do what they do, and what they believe their value proposition is, can help you assess if they can meet your needs.

What index-specific support will you provide throughout the index-licensing relationship? 

Given how crowded the ETF field is, any differentiation can be an asset. Many index providers only offer basic levels of support and become the “set it and forget it” type of financial services. However, a good partner will be responsive and have digital marketing capabilities to help the fund grow its AUM.

How does your governance committee handle methodology changes, and what is the communication process? 

Clear communication is critical in any enterprise, and ensuring an index partner is transparent about methodology changes can help keep the partnership aware and aligned..

What is your index reconstitution process, and how do you reduce market impact? 

Any given product will express a market view and influence allocation decisions. Accordingly, an index must constantly adjust and iterate based on current market realities. 

How do you ensure consistent index calculations when the market experiences a disruption? 

A good index partner will have a playbook for dealing with all sorts of market volatility and make well-considered, data-driven decisions.

Common pitfalls when choosing an ETF index service provider

Asset managers can run into some of the following challenges when choosing an index partner. 

Two common pitfalls to avoid

The number-one challenge when choosing an ETF index service provider? Failing to thoroughly examine an ETF index service provider’s index construction methodology. 

Misunderstanding their methodology can create issues for the fund manager and greatly impact your investment strategy.

Another extremely common misstep is to choose an index partner who barely collaborates. Once a product has been built, you want an index partner who will throw their all into making the product launch a success. 

What else should you consider when choosing a service provider?

Issuers must walk a line when they consider ETF index partnerships. On the one hand, they need to make sure they are partnering with someone who understands the specific market sector their product will be built around. On the other hand, you also need an index partner with a wide range of indices. 

Suppose you’re building a specific equities product for one sector of the domestic market. In that case, you want an index service partner who deeply understands that market and has indices that include fixed income benchmarks and international exposures. 

A wide range of indices indicates better data sets and enhanced capabilities. However, they also need to have some measure of understanding of the specific market segment you are trying to capture. Finding a partner who is both a specialist and a generalist can be challenging, but it’s not impossible. 

Additionally, issuers will want to make sure that there are no conflicts of interest with how an index is governed, including relationships with subsidiaries. When looking at methodology and construction, you also want to be on the lookout for concentration risks or opaqueness on the part of the potential ETF index partner. 

Conclusion

Launching a new ETF is a high-stakes event. Historically, ETF index service providers have been checked out of the process. That approach made more sense in an era when the ETF was a new wrapper, there was less competition,and requirements of the indices needed were much less complex, mostly broad, beta datasets.

But now, ETFs are a dominant force in the ETF market and competition for AUM is fierce. An index provider must be committed to the success of the products using their indices.

Given the complexity of the ETF ecosystem, it’s critical to find a suitable ETF index partnership. Issuers need responsive, flexible index partners who can contribute to a product’s success on multiple fronts. 

There’s more to it than just licensing a benchmark, and the issuers that take the time to find a real partner will position their ETF business to take a bigger portion of market share and improve the odds that the product will capture AUM and grow.

VettaFi offers a unique suite of index services within the financial services industry, with the ability to be a partner throughout the product’s lifecycle. Learn more now.

 

  • From design studios to construction sites to building operations, AI and robotics are driving a fundamental evolution of the real estate industry.
  • At construction sites, AI and robotics are beginning to transform building processes that are labor-intensive and dangerous.
  • After construction, AI continues to add value to a building’s operational life through energy management, security applications and enabling “smart buildings.”

Artificial intelligence and robotics are fundamentally reshaping the real estate industry value chain, from design and construction to operations and usage patterns. This transformation represents an opportunity for investors seeking exposure to the convergence of technology and physical assets.

This report examines how AI is impacting real estate from two crucial perspectives: 1) physical world transformation and automation; and 2) AI enablers and applications. Public companies discussed are constituents of the ROBO Global Robotics and Automation Index (ROBO) and/or the ROBO Global Artificial Intelligence Index (THNQ).

AI in design and planning for real estate

AI is revolutionizing architectural design, space utilization, energy efficiency, materials science simulation and optimization, and urban planning through advanced simulation capabilities. Urban planners and architects globally are using AI-based simulation to create “digital twins” of cities. This allows them to test how design choices affect traffic flow, sunlight, wind, and energy usage before anything is built.

For example, Autodesk’s (ADSK) Oslo-based Spacemaker platform leverages cloud AI for optimizing site plans for neighborhoods and buildings. Architects and developers are able to “test design concepts in minutes.” This generative AI approach helps professionals make better early-stage design decisions and maximize long-term project sustainability?.

By processing massive datasets (geospatial data, climate patterns, zoning rules, etc.), AI can quickly and efficiently uncover design solutions that balance aesthetics, cost, and environmental goals. AI-backed approaches far surpass manual methods.

Example AI & robotics companies enhancing real estate design and planning

AI and robotics transforming construction

At the construction site itself, AI and robotics are beginning to dramatically transform building processes that are labor-intensive and dangerous. We are seeing the emergence of semiautonomous and autonomous machines that can augment or even replace certain onsite activities. Drones and agile ground robots, equipped with AI, are handling tasks like surveying, site inspection, and progress monitoring.

Beyond inspection, AI-enabled robots are directly performing construction tasks. Autonomous or semiautonomous heavy equipment is a fast-evolving reality. Bulldozers, excavators, and cranes are being outfitted with AI guidance systems to perform groundwork with minimal human input.

ROBO constituents transforming construction

Building operations, analytics, and energy management

After construction is complete, AI continues to add value over a building’s operational life. Modern building management systems (BMS) are incorporating AI algorithms to turn ordinary facilities into “smart buildings.” Sensors and IoT devices embedded throughout a building can feed real-time data on occupancy, temperature, air quality, lighting levels, equipment status, and more into cloud-based AI platforms.

For example, companies like Samsara (IOT) provide a Connected Operations Cloud that allows organizations with physical assets (buildings, factories, vehicle fleets) to harness IoT data for actionable insights.

Safety and security are another major aspect of building operations AI is enhancing. Traditional security cameras produce a flood of footage that is impractical for humans to monitor in real time. AI computer vision now can analyze video feeds for threats or issues. Specialized vision-processing chips from companies like Ambarella (AMBA) enable cameras to perform on-device analytics with deep learning.

AI is fundamentally altering how real estate assets are valued, marketed, used, and repurposed. The traditional property valuation process relied heavily on human appraisers applying subjective judgments and limited sales comparisons. Today, machine learning algorithms can analyze thousands of property attributes and market factors simultaneously to generate more accurate, objective valuations.

AI is also playing a significant role in the drive for energy efficiency and sustainability given how much energy buildings consume. Almost a fifth of total global energy consumption is used for heating, cooling, and lighting buildings. Industrial companies like Emerson Electric (EMR) and Schneider Electric (SU) are focused on energy management for buildings.

Companies reshaping building operations, analytics and energy management

Impacts of real estate usage evolving

Perhaps the most far-reaching impacts of AI on real estate will come from the changing ways we use physical space as AI-driven systems become ubiquitous. One major example is the advent of autonomous vehicles (AVs) and delivery drones. These are poised to reshape urban infrastructure and land use.

If self-driving cars and trucks become mainstream in the coming decades, cities may need far fewer parking garages and surface lots. AVs, especially when used in fleets or ride-sharing services, can relocate or continue circulating instead of parking.

Over time, drone pickup and drop-offs will become more common. An example is private company Zipline’s agreement with Walmart (WMT) for drone deliveries near Dallas.

Conclusion and outlook

From design studios to construction sites to the daily management of buildings, AI is driving a fundamental evolution of the real estate industry on a global scale. The themes outlined — smarter design, new materials, robotic construction, intelligent operations, energy optimization, and evolving space usage — are all interconnected pieces of a decades-long transformation. Crucially, these are long-term, secular trends rather than passing fads.

To learn more about AI, please join our upcoming webcast on May 2 at 11 a.m. ET: “Investing in AI: Separating Hype from Reality in the AI Revolution.”

ROBO is the underlying index for the ROBO Global Robotics & Automation ETF (ROBO). THNQ is the underlying index for the ROBO Global Artificial Intelligence ETF (THNQ).

This article was originally published May 1st, 2025 on ETF Trends.

Investing is a long-term game, according to conventional wisdom. But as issuers look to grow their AUM, it is important to understand what is happening today. Investors want to know why one product is better than thousands of other products they could invest in. You can make a cogent case for the product’s investment philosophy and back it up with all of the data, stats, and projections in the world, but for many investors that’s not enough. They need to understand how it fits into the world today, as well as long-term.

Investors are constantly consuming finance media. What stocks are down and which companies are up might ultimately not matter in the long term, but it does matter today. And today is when you want investors to invest in your product.

Tethering your product to current market events can help demonstrate the value and utility of your product. Of course, getting third party media institutions to spill ink or provide soundbites about your products can be a challenge. This is why third party sponsored content could be a critical early- to midfunnel tactic.

What is sponsored content, exactly?

There are many ways to market and advertise a product. Based on where a prospect is in the marketing funnel, every tactic has a purpose. Before we dig into what sponsored content is, it is important to note that it is different from a direct advertisement. A billboard advertising a restaurant might not provide many details about the restaurant, but it does give drivers passing by a touch point. They might not be hungry, but now they know the name of the restaurant. 

In a similar fashion, issuers will often put up ads that mention tickers or, if on the internet, link back to landing or product pages. For many potential clients, a direct pitch can be offputting. Financial advisors managing large AUM know that issuers want their business and can be guarded against direct first-party appeals. 

But sponsored content presents analysis from a third party. This offers a host of advantages for an issuer. For one thing, a third party is not beholden to the same compliance standards. Because they have their own authorial perspective, they can more seamlessly fold in ticker references and mentions. 

Websites like ETF Trends offer ETF issuers an opportunity to sponsor channels. These channels operate like a micro-site to present financial news and information, while also being a home to product endorsements. Not only does this help with top-of-funnel ticker and brand recognition, but the content itself is useful for getting prospects further down the funnel to understand how and when a product might be used in their portfolios. It can showcase a product without being a direct pitch. 

Today, and today, and today

As much as investors are thinking about tomorrow, intellectually, emotionally, and experientially, it is always today. Today matters. Which means issuers need their products and services to not only fit into long term narratives, but make sense of the moment, particularly if a market moment is highlighting the need for a product. 

For example, in 2024, energy started the year as the strongest performing sector in the market, but then fell off. When October rolled around, a geopolitical crisis between Iran and Israel suddenly altered the performance of the energy space. Having news and analysis that walked through the events leading up to the crisis and unpacking how the crisis could impact energy investors gave Alerian’s midstream funds a moment to shine. If investors had the market view that the crisis could be ongoing or worsen, they now understood that investing in one of Alerian’s MLP funds could give them more exposure. 

Even if investors were to take up the opposite view, this kind of coverage and the ability to tether a product to a recent news event can linger in a reader. An investor who thought the crisis would be mitigated and energy would fall again might not invest right away. However, if their perspective changes in the future, they now understand MLPs to be an energy exposure option amid times of geopolitical strife.

The ongoing active management surge

Looking a bit more at the present, the Trump administration, through its tariff policy, is creating market uncertainty. The world is pivoting away from the U.S. dollar.

In a broader sense this means that now, more than ever, asset managers need to contextualize products amid current events. Investors are seeking guidance on what to do. This specific story itself, though, has ripples across a variety of sectors and products.

T. Rowe Price has successfully leveraged sponsored content to stay ahead of the tariff news and remind investors of the importance of active management. In this article, VettaFi’s Peters-Golden writes, “Active management can help a fund adapt to tariff news. For example, an ETF’s fundamental research capabilities could help it better predict which firms will be more or less harmed by tariffs. Rising supply chain costs may impact certain firms more than others. At the same time, fundamental analysis can also help identify firms with healthier balance sheets.” He then pivots to describing specific T. Rowe Price funds.

International investing and the value of sponsored content

U.S. stocks have had an historic dominance in recent years, but nothing lasts forever. Though many analysts have noted that large-cap U.S. companies might be overvalued, it's hard for that kind of analysis to stick when the market news is just a line going up on large-cap performance. The Magnificent Seven and FAANG before them were juggernauts.

Issuers with international products had a more challenging time, but current events have helped them articulate their case. VettaFi’s Karrie Gordon, writing on the China Insights channel sponsored by KraneShares, noted in a March 19th article that “Economic policy concerns, trade wars, recession risks, and more plague U.S. markets. Meanwhile, in China, another round of policy support announcements and major earnings beats from China internet giants sent stocks surging in March. The KraneShares CSI China Internet ETF (KWEB) provides exposure to the category and is up 29% year to date.”

Demonstrating the practical applications of a product helps investors understand how they could use it. Seeing a product perform well amid specific news events can help prospects move further down the funnel and begin to consider an allocation.

Playing offense and defense

Sponsored channels are also terrific vehicles for helping investors think about complex stories in a way that can be beneficial to a sponsor. They have a capacity to both play offense by demonstrating investor use cases and defense by helping investors see the upside amid troubling news. 

For example, back in 2023, international investors had questions about the Biden administration's new rules on China investments. This piece from Peters-Golden helped alleviate concerns investors might have about how these rules could impact their China exposures. Peters-Golden wrote, “Despite short-term pain from these headlines, however, analysts at KraneShares believe there’s a silver lining for investors interested in China. Yes, the U.S. has implemented a range of regulations on U.S. investors and companies’ ties to Chinese tech sectors over the last few years. However, KraneShares sees this latest drop as a positive for investing in China. Per the firm’s recent note, it believes these new regs could be the ‘final guardrails’ in the U.S.-China trade and investment relationship. In such a scenario, investors may be freed from concern about further, looming regulations.”

Set yourself up for success

Issuers looking to scale their products and share their investment ideas need clear, compelling messaging. But that’s not enough. Like a well-constructed portfolio, marketing strategies should be diversified. Sponsored content can enhance proprietary materials and offer another effective way to connect with the investors who matter most.

Looking to be top of mind for investors and contextualize your products within the broader market environment through sponsored content? Learn more here.

 

While global defence spending was already growing, focused on the modernisation of defence capabilities and NATO’s spending target of 2% of GDP, a large-scale conflict on EU borders was a wake-up call for NATO and its European members. Today, the war still rages on, and after a contentious meeting at the White House with Ukraine President Zelenksy, the U.S. paused all military aid and intelligence to Ukraine, with far-reaching repercussions. A new European era of defence was ushered in, with a resolve to be less reliant on the US as an ally with a commitment to European rearmament and autonomy. The EU Commission has devised a “ReArm Europe/Readiness 2030” plan the tenants of which were published in a White Paper for European Defence and the ReArm Europe Plan-Readiness 2030 on 19 March 2025, outlining its 5-year plan.

The EU white paper offers solutions to strengthen the defence industry by closing capability gaps and ensuring long-term readiness. It also suggests ways for Member States to invest heavily in defence, buy necessary equipment, and support the industry’s growth over time. The plan calls for €800 billion of investment for a massive ramp-up of defence spending.  It will also include a €150 billion credit facility, the Security Action for Europe (SAFE) plan, that will help fund this investment. By activating the national escape clause of the Stability and Growth Pact, EU members will be able to increase defence spending an additional 1.5% of their GDP, equating to 650 billion euros over the next 4 years.

Key areas of action explored in the piece include:

  • Closing military capability gaps in areas such as air and missile defence, artillery and munitions, and drone and counter-drone systems.
  • Supporting the European defence industry by buying European first with the goal of 65% being sourced from the EU, Norway, or Ukraine. 
  • Deepening Europe’s defence capabilities with development of future of defence technologies like AI, quantum, and cyber defence.  
  • Enhancing Europe’s readiness for worst case scenarios, by stockpiling, improving military cooperation, harmonization, and mobility across Europe.  
  • Continued support for Ukraine and what is being called a “Porcupine Strategy” aimed at deterring further Russian aggression. 

The benefits of sponsoring and attending industry events and conferences can be highly impactful to your bottom line. They offer a chance to connect to clients in-person, share thought leadership, and supplement your digital distribution efforts with face-to-face business opportunities. Additionally, they are terrific content vehicles. Photos, social media posts, and think pieces can all be created and deployed before, during, and after a big event. 

But many issuers who opt-in to sponsoring a conference fail to take full advantage of the opportunity. Think about the exhibit halls of most conferences. Have you ever seen someone manning a booth and just scrolling on their phone? A presence at a conference is always a net gain. Simply showing up has benefits. But conferences present a host of opportunities to sponsors. If you are spending the time and resources to create swag and sponsor an event, you should squeeze every ounce of value out of it that you can.

The recent Exchange conference in Las Vegas showcased several asset managers who deeply understood how to make the most of the event.

Tap into the moment

Conferences exist at specific points in time. Most points in time are associated with broader cultural forces. Tying an activation to something that is happening, even outside of the world of finance, can deepen the activation. A shared experience is humanizing, after all. Exchange 2025 happened in March, which means March Madness is top of mind. 

State Street Global Advisors set up a Connect Four basketball exhibit on the lawn at the conference venue. Attendees could approach, grab a ball, and try to connect four shots in a row on a grid. This became a popular spot for networkers who just connected to deepen nascent bonds through competitive play. With State Street’s branding all over it, the activation facilitated conversations, provided attendees with social media fodder, and spoke perfectly to a specific event happening at the same time as the conference. This activation was rooted in a simple idea that accomplished a lot through being tethered to something that people were already interested in. Because March Madness is a phenomenon, social posts about the activation were more likely to see traffic boosts and the impact of the activation was enhanced as a result.. State Street also had speakers at the event, and the presence of thought leadership mixed with a clever activation inspired good will among attendees. All it took was a little planning in advance and understanding of what conference-goers might be interested in doing.

Tap into the location

Conferences exist at specific points in time. Most points in time are associated with broader cultural forces. Tying an activation to something that is happening, even outside of the world of finance, can deepen the activation and bring a timeliness element to the activation. A shared experience is humanizing, after all. Exchange 2025 happened in March, which means March Madness is top of mind. 

The Las Vegas Grand Prix is a big deal in the Formula 1 world. Formula 1 has seen increasing popularity amid a Netflix documentary and growing fan base. CF Benchmarks put a race car directly on the floor of the exhibit hall, creating an activation that resonated with the host city for the conference. The presence of the vehicle on the exhibition floor became a natural conversation starter for attendees and was impossible to miss. 

When in doubt, lean into basic needs

There are no doubts that creative, unique event activations can move the needle. In Exchange 2024, Grayscale set up a drone laser show that dropped jaws and had the entire conference talking. But not every activation needs to incorporate out of the box thinking or have the budget for an elaborate drone laser show. Asset managers can earn tremendous good will simply by thinking about the basic needs of conference attendees. 

Every conference runs on coffee. Conferences are also hotbeds of happy hours, dinners, and late nights, so there is a premium placed on good coffee. Even people with relatively light evening schedules and plenty of down time need a pick-me-up. Lazard responded by curating an entire coffee bar, complete with seating and tables, in the exhibit hall. Now, the conference itself was also offering urns of coffee, so Lazard understood their café needed to be next level. Crack baristas quickly and efficiently put together top tier coffee beverages for anyone walking by at any time, creating a networking hub within the networking hub that is the broader conference. Anyone who walked the exhibit hall at Exchange 2025 probably noted the constant traffic near Lazard’s cafe. Lazard was also trying to generate hype for a new product launch, and having one of the most consistently crowded booths on the exhibition floor helped reinforce that buzz.

Nuveen had a similar activation. Understanding that happy hours are a big deal at professional conferences, they set up a “muni-rita” bar to cleverly showcase their muni products and give attendees an easy-to-get-to happy hour spot. ROBO Global, meanwhile, had a similar idea, programming a robot arm to mix drinks for attendees. Both of these activations spoke to basic needs among attendees and provided plenty of good attention to the brands that deployed them.

Work everything you have at the maximum level

You don’t have to have bottomless spending to have a successful conference experience. Sometimes all it takes is being present throughout the lifecycle of a conference.

Conferences are more than a couple of days on a calendar. They are months of lead up and preparation. They are also their own aftermath. Before a conference, you can be setting up meetings, inviting prospects, and putting yourself in position to succeed. After the conference you can be active on social media, sharing reflections, and taking every possible opportunity to put your product, ideas, and people in the spotlight. 

X-Square Capital came to Las Vegas from Puerto Rico. Their purpose in going to Exchange was to share their Triple Tax Exempt muni fund with a broader financial advisor audience. 

In advance of the conference, they booked interviews. At the conference, their team worked. They talked to everyone they met. They handed out swag. They took every opportunity they could to talk to people, share their ideas, and put their best foot forward. Showing up can be enough, but truly showing up means embracing possibilities and being an active partner with the conference host. Many firms are content to just let their branding do the work, but the firms that get the most from any conference are the ones who put in the effort on the floor. X-Square certainly did that at Exchange.

Set yourself up for success in 2026

At the end of the day, all of this comes down to preparation. Committing to going to a conference early gives you time to plan and prepare. Making a smart or useful activation happen can lead to a huge ROI. 

As asset managers are crunched for time and resources, it can be hard to give any task its due. But taking the time to have a smart conference plan and then executing on that plan can pay huge dividends. There is an opportunity cost to any event. You are spending money to get your logo in front of prospects and take advantage of all that a conference has to offer. As discussed, even phoning it in can make the opportunity cost worthwhile. But why phone it in when, for just a little bit more effort, you can get exponentially more dividends out of your sponsorship?

Interested in setting yourself up for conference success? Speak to our experts.

While broad energy ETFs have largely seen outflows over the last two years, midstream or energy infrastructure ETFs have enjoyed solid inflows. Often, these will be categorized as MLP ETFs. It is a simple delineation among the more than 4,000 ETFs. However, most “MLP ETFs” only own up to 25% MLPs.

For investors allocating to energy infrastructure, it is important to understand that there are two types of MLP funds with notable differences. This note explains MLP funds, their use cases, and other ways investors can access the midstream space. Investors are encouraged to review prospectuses and fund materials for more detail.

The two types of MLP funds.

Investors may prefer to access MLPs through funds to avoid the Schedule K-1 that comes with direct MLP investment. There are two types of MLP funds, whether looking at ETFs, mutual funds, or closed-end funds. Both types issue Forms 1099 but have other important differences in tax treatment. Specifically, any fund with more than a 25% weighting to MLPs is taxed as a corporation.

On the other hand, funds that own up to 25% MLPs are structured as RICs. Most funds registered under the Investment Company Act of 1940 (often called ’40 Act Funds) are RICs. RICs are considered pass-through entities and aren’t subject to corporate taxes.

MLP-focused funds taxed as corporations.

Among midstream investment funds, there is a small subset that predominantly own MLPs and are taxed as corporations. The number of these MLP-focused funds has declined over the last several years (read more). There are only three MLP-focused ETFs structured as corporations. The largest of these is the Alerian MLP ETF (AMLP). AMLP is the second-largest energy ETF.

MLP-focused funds tend to appeal to investors who are looking to maximize income. Historically, MLP funds structured as corporations have retained the tax characteristics of MLP distributions, including the potential for tax-deferred return of capital (read more). For longtime holders, the tax treatment of distributions from MLP funds is typically return of capital or qualified dividends, but investors should consult fund documents.

MLPs typically offer higher yields than midstream corporations. The Alerian MLP Infrastructure Index (AMZI) was yielding 6.8% as of March 27. AMZI is the underlying index for AMLP.

Additional detail for MLP funds taxed as corporations.

Due to their taxation as C-Corps, MLP-focused funds can experience tax drag, and fund performance would be reduced by the taxes accrued. There can also be times when the fund’s tax drag is negligible due to past losses.

An MLP fund, taxed as a corporation via its partnership holdings in the underlying MLPs, will accrue deferred income taxes for any accelerated deprecation taken by the MLPs and for the unrealized net gain on its underlying holdings. Deferred income taxes are based on the corporate tax rate (currently 21%), plus a few percentage points for state taxes.

For example, if an index of MLPs gains 10%, the ETF tracking that index may only gain 7.7% if it is accruing for a deferred tax liability (DTL). On the other hand, a DTL can act as a buffer if equities are falling. In that scenario, a 10% decline in the underlying MLP index would equate to only a 7.7% decline in the fund as the DTL shrinks (similar to adding an asset). This simplified example is depicted below.

Deferred tax liability on hypothetical MLP fund performance relative to its underlying basket

There can be times when tax drag for MLP-focused funds is minimal due to past losses from holdings declining in value. In simple terms, past capital losses can offset capital gains. Fund-level taxation adds complexity, but the attraction of MLP-focused funds has historically been their generous yields.

Midstream ETFs structured as RICs.

Most midstream funds, including ETFs, are structured as RICs and only own up to 25% MLPs. There are around a dozen midstream RIC ETFs, encompassing active and passive approaches. Alongside MLPs, these RIC ETFs will typically own U.S. and Canadian midstream corporations. Some funds have sizable allocations to utilities, which tend to have lower yields and greater interest rate sensitivity relative to midstream. Because MLPs are only up to 25% of RIC-compliant “MLP ETFs” by weighting, it is important that investors understand what is in the other 75% of the portfolio.

An investor may prefer to get midstream/MLP exposure through a RIC if they are primarily seeking total return. RICs do not have the potential tax drag associated with MLP-focused funds taxed as corporations but also have lower yields. The Alerian Midstream Energy Select Index (AMEI), which caps MLPs at 25% and also includes U.S. and Canadian midstream corporations, was yielding 5.1% as of March 27. AMEI underlies the Alerian Energy Infrastructure ETF (ENFR). The 10-year average yield difference between AMZI and AMEI is ~200 basis points.

Investors may also prefer RIC products if they desire greater diversification. RICs must adhere to diversification rules, while MLP funds structured as corporations are considered nondiversified. Funds with corporations and MLPs provide broader exposure to the midstream universe.

Investors may also want to own familiar corporations like Kinder Morgan (KMI) or Williams (WMB) that no longer have related MLPs. Additionally, funds with U.S. midstream corporations tend to have more exposure to natural gas infrastructure, which has benefited from a strengthening outlook for North American natural gas demand (read more).

Other ways to access the midstream space.

Often, listings of MLP ETFs will also include exchange-traded notes (ETNs). There are currently five energy infrastructure ETNs. The largest is the JPMorgan Alerian MLP Index ETN (AMJB). The main appeal of ETNs is little or no tracking error. Midstream ETNs also issue Forms 1099. ETNs tend to be most suitable for investing in tax-advantaged accounts, because their coupons are taxed at ordinary income rates. When using ETNs, investors should be comfortable with the credit risk of the issuing bank (read more).

For international investors, there are two UCITS ETFs that provide exposure to North American energy infrastructure. For context, UCITS is a European regulatory framework intended to protect investors. The Alerian Midstream Energy Dividend UCITS ETF (MMLP LN) tracks an Alerian index that includes U.S. and Canadian midstream corporations with an allocated exposure to MLPs through AMJB.

Bottom line:

Midstream investors primarily seeking income will likely prefer a fund that predominantly owns MLPs. Investors who are more focused on total return and broad midstream exposure will likely prefer a RIC-compliant midstream ETF.

Vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMLP, MLPB, ENFR, ALEFX, and MMLP.LN, for which it receives an index licensing fee. However, AMLP, MLPB, ENFR, ALEFX, and MMLP.LN are not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or trading of AMLP, MLPB, ENFR, ALEFX, and MMLP.LN.

This article was originally published April 1st, 2025 on ETF Trends.

Last month’s Exchange conference brought together financial advisors, asset managers, and financial professionals for a face-to-face experience. Experts like Dr. David Kelly offered in-depth market analysis, providing attendees with their knowledge and deep understanding. Geopolitical expert Ian Bremmer shared a sobering outlook on the implications of broader global politics and investing.

There were sessions devoted to practice management and plenty of solid, concrete information circulating to make the conference more than worth the opportunity cost of attending. But what Exchange 2025 truly revealed was the importance of the human side of finance. 

Take a walk on the human side

Retirement expert and author of “Your Best Financial Life,” Anne Lester, led a powerful discussion keyed into helping advisors connect to their clients on a human level. “I think it’s challenging for people who spend their lives in a compliance-controlled environment, surrounded by numbers and graphs sometimes to remember that our clients are human beings,” Lester shared.

Jennifer Morgan started her keynote dancing to Pitbull and spent a sizable amount of time off the stage and in the audience, connecting directly with attendees. Aptly, her session was titled “Escape the Sea of Sameness.” Morgan argued that relationships are increasingly important for financial services professionals. In a crowded marketplace, it’s one of the few ways you can stand out. “If you build a relationship, business can come later,” she noted.

Put the spreadsheets down

Lester and Morgan weren’t the only ones prodding attendees to exit out of Excel and take in the people around them. Shaping Wealth’s Neil Bage and Brian Portnoy moderated a workshop devoted to “human first” financial planning. “What got us here isn’t going to keep us or sustain us going forward,” Bage said ahead of the workshop. “We need to pivot in the way we engage with the people we are here to serve.”

Bread’s founder Kyla Scanlon also brought her unique talents to Exchange. Again, the focus was on humans. “I try to center people and the economy because people are the economy, at the end of the day,” Scanlon shared when discussing her session on The Road to Exchange. Scanlon is known for bringing economic information and learning directly to her Gen-Z audience over social media. 

Products in the modern world

Like any industry, finance offers products and services to customers. An asset manager creating a unique ETF and getting investors to put money in it might be more complicated on paper than a diner selling a customer a cup of coffee, but at the end of the day, it all comes down to transactions.

Advertising has evolved as channels of communication between people have changed and developed. In the 1950s, Brylcreem advertised in black and white on TV that “a little dab will do ya” in a minute-long spot airing on prime time. By the aughts, restaurant chain Denny’s was advertising via an absurdist Tumblr account that replied to social media posts — often in the middle of the night.

The pivot to being human

These are all disparate threads that point to a common phenomenon; namely, that there is a widespread need for actual connection and authenticity across all industries. A social media account from a brand directly selling a product feels inauthentic and forced. The genius of the Denny’s Tumblr was that it had a very human voice that reflected the experience of being at a Denny’s at an unusual hour. Because it would reply to people who posted at it, often outside of working hours, it felt less like a brand and more like a human being, which, spoiler alert — it was! Serenity Discko put in exceptional work to be the human behind the brand.

In her session, Lester noted that many young people do not trust banks, institutions, asset managers, or financial advisors. They trust their peers. That’s why Scanlon’s TikToks and short videos have such appeal. She presents herself as she is: a human being trying to figure out the complicated mess that is finance.

Advisors still want to understand the market. They want to know about the opportunities that experts like Rob Arnott see in the market. But, increasingly, they want more than that. Compared to 2024, an additional 10% of attendees at Exchange 2025 indicated they were more interested in networking time, according to a post-event survey. 

Live events offer asset managers a chance to show their humanity

All of this is not to say that asset managers need to find their own version of Denny's Tumblr. But the world is becoming increasingly uncertain for investors. As global power dynamics shift and the world becomes, in many ways, a far scarier place, being human matters more than ever. 

Advisors are starting to understand the need for this shift. They are learning about the value of traditional soft skills. Exchange is curated in partnership with advisors. That’s why so many of the top spots on the agenda were focused on being human. 

Lester’s session urged advisors to understand the thinking and the shame that comes with money for many people. Morgan was doling out practical, concrete steps about how to make an impression on someone and connect. Scanlon was helping advisors see past their generational blinders to connect with tomorrow’s wealth owners. Bage coached participants directly on how to interact. 

Even the activations encouraged human connection. VettaFi leaned into the Vegas theme with a bespoke set of cards, but on each card was a question you could ask someone you just met. The networking cards provided attendees with conversational icebreakers in the form of a game. It’s not a surprise that the most popular booths throughout the conference were Nuveen’s Muni-rita bar and Lazard’s exhibit hall coffee shop. People wanted to enjoy a beverage while networking.

Fix your ability to connect, or stagnate

Behavioral finance is in vogue for a reason: People are seeking ways to connect to and understand each other. As Lester astutely noted in her session, often, when intellectual finance experts talk, people hear Charlie Brown’s teacher. Experts have a tremendous amount of knowledge, but the connection is critical. The smartest, most prescient products will continue to die on the vine if the issuer can’t connect with potential clients.

Conferences like Exchange offer a unique opportunity to get in front of an advisor community as a human being navigating the world. Experiential marketing is an easily overlooked tool in the marketer’s toolkit. Given today’s uncertain climate, it could be more important than ever. If the global economy slows or goes through a period of transition, many firms will be tempted to cut costs and lean on old tactics. The firms that will make it to the other side will be the ones that understand the importance of connecting as humans to other humans. To paraphrase Brylcreem’s legendary jingle, a little dab of face-to-face connecting will do ya.  

Interested in sponsoring a live event? Talk to our experts here.

VettaFi Head of Index Products Brian Coco and Head of Index Strategy Jane Edmondson discussed custom indexing at Exchange. In the session called “How and why asset managers are turning to custom indexing,” Coco and Edmonson explored the latest data and research driving new and innovative approaches to investing. They also covered how index providers can help transform a great idea into a concrete reality.

“There’s been a lot of talk about active ETFs,” Edmondson noted. According to Coco, active managers are frequently using custom indexes. Coco said, “Even though many of them are active, they are still using benchmarks behind the scenes.”

VettaFI’s evolution in indexing

Regarding VettaFi’s evolution, Coco explained, “It’s all premised on one indexing platform and one distribution platform.” VettaFi has acquired eight firms, and Coco shared that beyond bringing those strategies in, it has also benefitted from bringing in the innovators behind them.

Coco also shared his journey in the industry, which started at Credit Suisse. When TMX VettaFi was ready to be in the bond indices business, Coco had the unique opportunity to get his own work back. “It’s really fun to get your baby back,” he quipped.

Fixed Income index possibilities

“This acquisition really gives us the building blocks, which is table stakes if you want to innovate,” Coco offered. “Increasingly, people are looking for specific duration targets. They are looking for indices that are better designed for the ETF wrapper.”

Brian Coco and Jane Edmondson at Exchange 3-23-25

VettaFi Head of Index Products Brian Coco and Head of Index Strategy Jane Edmondson discussing custom indexing.

Being better partners 

Coco said that the ongoing partnership throughout the product lifecycle has made VettaFi’s indexing services stand out. “Our partnership doesn’t end when the index is licensed – that’s when it begins.” Having a marketing arm that helps grow the product has been the differentiator

Coco on theme

Coco also spoke about interesting approaches to broader thematic ideas, sharing one idea that involved looking at the average age of workers in given regions and using that data.“

When I think about the things driving us right now, I think about robotics.” He doesn’t know when C3PO-style robots will be in every house, but it is coming. Edmonson noted that most people already have robot vacuums.

Coco gets direct-to-direct indexing

Direct indexing has been disruptive to the ETF and index industry. “The platforms are really coming into their own partnering with index providers to develop better index solutions.”

VettaFi CMO Jon Fee discussed key trends in distribution to kick off the Industry Conclave at Exchange. Fee led the audience through some icebreakers and then began digging into the disruption driving durable growth.” I fundamentally believe data is greater than opinion,” he said. 

Fee on the cost of success

He shared a sentiment that the cost of entering the ETF market is low but that it is high to succeed. This is due to disruption. “Usually, people don’t like disruption because of its commonality with change.” Distribution has had disruption in multiple vectors, technology has been a big driver. Tech like ChatGPT and artificial intelligence is changing the landscape on various fronts.

How disruption happens

Disruption happens when power is consolidated. Fee noted that Uber broke the taxi and medallion model. Disruption also occurs when an outdated technology is updated. According to Fee, it can also occur when business practices aren’t changing despite negative sentiment. Importantly, it also happens when the data says so. 

“Think about the ETF when it came along. At the end of the day, the ETF is a technology and what did it disrupt?” Fee noted that the mutual fund had consolidated power, was an outdated technology, and the business was ripe for change.

VettaFi CMO Jon Fee on distribution

The “What” and “How” of disruption

Fee believes that distribution has always been about the act of sharing, making for a consistent “what” over time. The “how” is changing, however. Ultimately, much of the disruption has been pointed toward empowering the end investor. “The gap is so wide for financial literacy, but it closes a little bit every year.”

With 4,000+ U.S.-listed ETFs, these funds have created a lot of competition. People are always looking online for any product, including ETFs. This means that issuers and asset managers need to change with the times. Fee said that thinking about people is key. He asserted that issuers could find more success if they hire sellers who think like marketers, hire marketers who sound like sellers, and put AI in their org chart. “You have to start thinking that way.”

Fee on distribution strategy

Looking at how issuers approach distribution, Fee urged them to consider a pivot to client-centric functions. “Put on your values, client-first, whatever it is.” Getting out of asset class structures and leaning on cross-trained people who deploy data-backed tactics. “Those that are winning now, they are allocating to data -backed tactics.” Fee also urged that it is essential to align your business with partners who share success metrics. “Push for outcome-based pricing. [It’s] super common in the tech industry.” Having partners who are invested in your success and who are dedicated to your success can be a difference-maker.

Executing strategically, these days, is very much about service. The speed at which an issuer can bring a product to market and out-service the competition is crucial. “The issuers who are treating speed as IP – they’re winning. They’re also leading from the outside in.”

There have been several recently launched ETF products, seeking to provide investors with private credit exposure in a liquid ETF wrapper. These include new products combining public and private credit instruments that cap illiquid assets at 15%. However, the pricing of the illiquid portion of the portfolio remains a sticking point for regulators. There are also more traditional approaches that provide exposure to liquid private credit instruments such as Collateralized Loan Obligations (CLOs). 

But why are investors clamoring to get private credit exposure in the first place? Private credit offers attractive yields from an alternative asset class that is less correlated with equities and bonds. This diversification benefit can reduce portfolio volatility and improve risk-adjusted results. 

The rise of private credit

It used to be that companies in need of debt financing would go to their community bank and apply for a commercial loan or line of credit. But, that paradigm shifted after the global financial crisis (GFC). Sweeping regulatory reforms applied after the crisis resulted in banks being unable to take on as much balance sheet risk. As a result, private credit solutions outside the traditional banking system emerged to fill this financing gap. Private credit loans can be tailored to meet borrower needs in size, type, and term. Similar to bank loans, most private credit loans are floating-rate debt, moving directionally with interest rates. 

The private credit sector includes four main types of private credit instruments:

  1. Direct lending – Non-bank lenders provide credit to private, non-investment-grade companies as part of the senior debt capital structure.
  2. Mezzanine, second lien debt, and preferred equity - These loans are collectively viewed as “junior debt,” providing borrowers with subordinated debt not secured by assets. It ranks below senior debt and often comes with equity “kickers,” which are additional incentives that can help supplement returns.
  3. Distressed debt - When companies are in financial distress, they work with existing creditors to improve their prospects by implementing operational changes and restructuring their balance sheets. Distressed debt is highly specialized; the abundance of opportunities tends to coincide with periods of economic stress and credit tightness. Lenders are willing to take on higher levels of risk in exchange for the potential for future higher returns.
  4. Special situations - Special situations refer to non-traditional corporate events that require custom and complex lending solutions such as M&A transactions, divestitures or spinoffs, or other situations driving borrowing needs.

VettaFi’s private credit index 

VettaFi’s Private Credit Index (VPCIX) uses publicly-traded, liquid instruments to provide exposure to private credit through Business Development Companies (BDCs) and Closed-End Funds (CEFs) that primarily invest in the private credit sector. Through our composite index of closed-end funds, we identify CEFs and BDCs with significant private loan participation and CLO exposures. Our diversified index approach, consisting of 50-60 holdings, helps mitigate individual credit risk. In addition, the underlying funds are actively managed by some of the best private credit investment firms in the industry such as KKR, Ares Capital, and Blackstone. 

Attractive alternative income opportunity

The VettaFi’s Private Credit Index (VPCIX) construction methodology considers volatility and dividend yield adjusted by float-weighted market capitalization. This index approach overweights funds consistently rewarding investors with high dividend income. The dividend yield of the index is currently over 12%. 

If you would like to learn more about VettaFi’s new VettaFi’s Private Credit Index (VPCIX), please reach out using the form here.

VettaFi CMO Jon Fee recently hosted the webcast, “Turn Data Into Sales: Strategies for Asset Managers.” The hour-long presentation featured Microsoft Director Gaby Marano and J.P. Morgan Asset Management’s Global Head of Business Intelligence & Analytics Danius Giedraitis. This event covered a variety of topics centering around how organizations can evolve their data practices. Here are the six key takeaways:

1. Financial services lags behind other industries when it comes to using data

Organizations that take advantage of customer behavioral data outperform their peers by 95% when it comes to sales growth, according to McKinsey & Co. Despite this, many asset managers are underdeveloped in their data capabilities. “There are probably some things that are far along relative to other industries, but there’s a lot of opportunity to do things more thoughtfully,” noted Giedraitis.

Looking at the consumer side, many companies have extremely sharp data deployment. Food-ordering apps are able to track preferences and send push notifications about deals to their customers, while map apps immediately provide the quickest directions to a destination and account for traffic. 

Financial services, particularly in distribution, have only scratched the surface of customer behavioral data. Investors who are actively researching commodities and alternatives, for example, are more likely to invest in diversifiers than an equity fund. Streamlining this data and providing it to sales gives the team an opportunity to pitch the right product to the right client — much like how Grubhub recognizes a customer’s preference for vegetarian takeout and tailors its recommendations accordingly.

2. More data does not always equal better outcomes

One common error organizations might make when beginning to implement new data practices is attempting to sponge up as much data as possible. Data can be a signal, but it can also be noise. When assessing key metrics for distribution performance and growth, the panel recommended focusing on six to eight metrics. Data-driven teams have a playbook on how to react depending on what these metrics do and a deep understanding of how they relate to one another. Once teams start employing more than eight key metrics, the data deluge can be distracting, especially if there’s no plan on how to proceed if the numbers fall above or below certain thresholds.

Additionally, organizations that are getting their feet under them when it comes to data lack the capacity to track and interpret a deluge of information. For such organizations, having a data partner is a smart investment that can save bandwidth for sales and marketing teams that might already be spread thin. 

3. Data evolution takes time and organizational buy-in

It is important for an organization to know where it exists on the data maturity curve.

Moving along this curve takes time. Different parts of the company might not be ready to take on new tools, while other parts of the firm may be eager to leap forward. The reality is that good data practices are an organizational relay race in which every department is working in lockstep with every other department. This means transmitting and sharing the right data at the right time. Fee likened it to a “relay race,” in which marketing is handing the baton to sales smoothly and keeping up momentum. Getting to this place takes time, effort, and organizational buy-in. It's important to not skip steps and to bring everyone along as a firm moves from underdeveloped status in data use to optimized status.

4. Your ‘super users’ can lead the way

Of course, organizations are composed of people. Different people have different skills, talents, and interests. Some will be “super users” of data. These are people who have an understanding and interest in data, who are eager to experiment with new tools and procedures, even if those tools and procedures aren’t fully cooked. 

Super users aren’t just early adopters — they’re the champions who can drive organizational buy-in for better data practices and tools. They provide critical feedback, help refine processes, and support colleagues who may be less comfortable with change. Since many professionals are too busy to experiment with new workflows, organizations need to present fully codified tools that are ready to implement. Super users play a key role in this by stress-testing solutions, guiding adoption, and ultimately easing the transition to more effective data practices.

5. The AI era is here, but it’s early innings

“I think the AI era is here, and it's here to stay,” said Marano. Distribution has always been impacted by tools and technology. Everything from phones to social media have changed the way sales and marketing do their work. Artificial intelligence is no different. Having AI that can tackle administrative tasks, take meeting notes, and free up employees to focus on mission-critical work can be a huge boon, but it's important to understand the technology is still in its early days.

In theory, AI will be able to remove the “no joy” parts of work so people can focus on the things that matter most to them. But the technology is still evolving. That said, Giedraitis warned that “every minute you wait is a minute that someone else is moving forward.”

Data teams experimenting with AI could be helpful for companies looking to evolve their data practices.

6. There is no silver bullet 

There’s no denying well-implemented data practices can transform an organization and help it grow. Proper data usage can increase efficiency and drive substantial AUM growth. But it's important to understand there is no silver bullet to success. There’s no one metric or data stream that can instantly solve all of an organization's issues. Data requires multiple touch points, and it needs to be vetted for quality and deployed with thought and care. It's useful to also understand that data goes beyond just numbers. When a sales team has a meeting with someone, there are linguistic data points. Marketers can use behavioral data to look at what people are researching. Data isn’t just about numbers going up and down. 

Importantly, you need to read the tea leaves and understand how everything relates to everything else. Clients will engage with products and services in multiple ways. Having a 360-degree view is essential.

Most firms struggle with data and systems integration. The firms that successfully navigate these challenges become industry leaders. In a recent webcast, VettaFi CMO Jon Fee, J.P. Morgan Asset Management’s Danius Giedraitis, and Microsoft’s Gaby Marano discussed how asset managers can turn data into sales.

Jon Fee kicked off the virtual event with brief remarks on the value of data and introduced his co-panelists. Fee said, “Data used wisely can make your organization so much more effective and efficient at the same time.”

Marano and Giedraitis introduced themselves and shared their data “a-ha” moments. “When I first started in the industry, data was a foreign language,” Giedraitis said, sharing how it later became the driving force behind the firm’s distribution strategy.

Gut decisions or decisions based on optics have their place, but Fee noted information stored in someone’s “gut” can’t be shared across a team, whereas data can.

Data maturity in asset management

Financial services lags when it comes to using data to drive distribution and growth. Yet organizations that leverage customer behavioral data outperform peers by 95% in sales growth and more than 25% in gross margin, according to McKinsey & Co.

Giedraitis commented, “There are probably some things that are far along relative to other industries, but there’s a lot of opportunity to do things more thoughtfully.” Though the finance industry has come a long way in regard to data, Giedraitis sees plenty of room for improvement and innovation. 

In contrast, Marano noted GPS apps and even food service apps are quite advanced in their data usage and deployment, saying, “I think that sets the bar really high on the consumer side.” In other words, there are industries that are further along in their data maturity journey, and those industries know when to use data to push their consumers to make a purchase. Uber Eats or Seamless will ping consumers when their usual go to restaurants are having a special deal at a time when the data says the customer could be most eager to purchase, as an example. Looking at finance, she added, “Those using AI are closing 10% more pipeline.” Marano continued, “The numbers are there.”

Common data misconceptions in asset management

Fee offered that there are misconceptions that hijack effective data usage in asset management. The first misconception was “more data equals better outcomes.” Other myths included, “Having data means you are data driven,” and “AI will replace human decision making.”

Speaking to the first myth, Marano agreed. “Getting your data sets to talk to each other is a prerequisite for getting the results you are seeking to drive,” she said. “[If] I had to add one more [myth] I’d say, ‘Data isn’t just numbers, it's text too.’” Language can be data too, and conversations that sales teams have matter.

“Data teams feel like every number, attribute, or field they can report on they should,” Giedraitis said. “With respect to all other metrics, a few metrics matter more.” Finding the metrics that drive the most important signals is critical, and it is easy to get lost in the weeds if you over-engineer. Speaking to AI misconceptions, Giedraitis said “The biggest misconception is people think it will cure all their problems. It won’t.”

Fee shared that the relationship between different pools of data is critical in making informed decisions. “It's never going to be a singular data point, it's going to be multiple data points you are triangulating that give you the trendline that helps you course correct.” When working with clients, he frequently asks what people do when a metric is positive or negative. Many don’t have an answer. “I typically encourage folks to go back and rethink the data that they are pulling.”

The evolution of data deployment

Organizations move through multiple phases in their data deployment evolution. Starting from an underdeveloped place, the initial integration of data can provide information from which they can make ad-hoc reactions. At this stage they have no data-specific roles, but they are beginning to see the value of data. From here, companies evolve into being proactive. Proactive companies start thinking about data quality and metrics, eventually becoming “optimized companies” that have data professionals on staff and implement procedures.

Sharing a graphic about the process of becoming an underdeveloped organization when it comes to data use, Marano said, “The message here is it's a journey, but it requires many foundational pieces to get there.”

Giedraitis added, “You can’t jump from undeveloped to optimized, because that scares people.” It requires a slow articulation toward being optimized. “Crawl before you walk before you run,” he said, sharing the old adage.

“The most important thing is the level of trust in data,” Fee said. When firms, enterprise wide, buy into and trust the data, that leads to success. “There’s a caveat to this — nobody trusts data until they're knowledgeable on what that data means.”

Data personas

Driving impact demands organizations to buy-in. Giedraitis shared, “What works well is finding the power users, the more data-literate individuals across teams.” These individuals can articulate the value of data from within and help build trust. “Doing that from just a small, centralized group is very hard.”

“Innovation is inherently uncomfortable. In disruptive times, trust is more important than ever,” Marano said. Building trust, camaraderie, and joint visions is crucial to getting an organization on board with building data practices.

Within organizations, some people are “super users,” some are “data explorers,” and some are “time-constrained decision makers.” Each will have a different relationship with data. Super users will try new things and be a champion for new technologies and ideas. But some folks are busy. The time-constrained decision maker isn’t interested in experimenting. “Eventually we try to look and empower each of these people differently.”

There are clearly other personas than these, and unpacking where the individuals in a firm are on their own journey and relationship with data can help firms evolve their organizational thinking and data practices.

The 360-degree view

Clients engage in products and services in a variety of ways. “Being able to see someone from all angles is paramount,” Marano said. “AI is only as good as the information it has.” Clients and customers are more than just purchases. What events do they attend? How do they behave digitally? 

“One of the things that’s important to think about,” Giedraitis said, “is to connect the engagement across these often fragmented systems.”

Marano also noted that sometimes organizations try to measure everything and flip what they are prioritizing frequently. Less can be more, and every decision requires time to pan out. Teams need the right data delivered in the right way to truly drive impact. Answering an audience question, the group agreed that six to eight key metrics is a healthy number. More can be too much, while less can limit the full 360 view.

Sales and marketing enablement

Mapping out a work system can be helpful for organizations. Fee compared growth to a baton, noting that teams have to pass opportunities to one another and everyone needs to be prepared to give it their all. Automating these systems and being able to pass data around easily and coherently can be a difference maker for an organization.

Tech and AI

Within the space of distribution, technology is constantly changing the landscape. Phones, social media, and AI are all big things that have changed the way distribution happens. 

Marano said, “I still think we’re in very early innings.” Having machines handle administrative tasks, like taking meeting notes, can help free up time for employees to do what’s most important and interesting about their job. Done well, AI could improve productivity and help manage risk and compliance. 

“Doing more with the same is how we’ve been framing it,” Giedraitis said. Transforming client experience and modernizing market and data platforms are green spaces where the tech can improve, but Giedraitis agreed that taking out the “no joy” parts of work can be hugely beneficial.

“I think the AI era is here, and it's here to stay,” Marano said.

Giedraitis added, “Every minute that you wait is a minute that someone else is moving forward.”

Watch the full webcast here and speak to our data experts.

Evan Harp sat down with VettaFi’s Head of Index Products Brian Coco and Head of Fixed Income Products Samarth Sanghavi to discuss the recent acquisition of Credit Suisse Indices from UBS.

Evan Harp: Can you tell me a little bit about how this acquisition came about and why it is useful for the partners that VettaFi serves?

Brian Coco: To give you a little background, both Samarth and I worked on the team that created these indices at Credit Suisse. I started working on them in 2001 and Samarth joined the team in 2010. So we have a lot of history with these indices.

When the opportunity came about to potentially acquire them, we jumped at it. There are not that many bond index businesses out there. It's a small competitive space dominated by four or five firms. So this was one of the last potential acquisitions available that had history going back 25 years.

Evan Harp: VettaFi’s index team has a reputation for its work in the equity space, can you talk about how this expansion into fixed income will benefit our clients and partners?

Brian Coco: Our clients have been sharing for a while with us that they are looking for a partner on the Fixed Income side that delivers what we aim to do in Equities in terms of product innovation, speed to market, and attention to detail.  They often choose us as a partner not just because of our ability to quickly customize and develop new products for them, but ultimately because of our ability to help educate investors and promote their products. We help explain to their end investors the benefits of using that particular index. 

We knew we could take some of those same concepts and frameworks that we built for equities and roll them out to fixed income. The fixed-income space hasn't seen quite as much innovation as there has been on the equity side. We think we can put a lot of the work we've done on the equity side to good use here.

A long track record

Evan Harp: You mentioned that you have a history with these indices from going all the way back to 2001. Can you talk a little bit more about what your role was back then? Did this opportunity come about because of that history, or is this just a happy coincidence? 

Brian Coco: I was hired onto the team in 2001 as an index research analyst focused on gathering and organizing all the data we would need to build advanced bond analytics.  Big investment banks would build these indices as a soft-dollar service to their trading clients.  It helped them do more advanced portfolio analysis and performance measurement.

Once we made the decision that we wanted to be in the Fixed Income Index business, asking UBS if they would consider selling us the indices was a no-brainer.  I also couldn’t be happier to bring Samarth on board to partner with clients on growing this franchise.

Evan Harp: Samarth, what are you most excited about in regard to this acquisition?

Samarth Sanghavi: I am really excited to be able to work with the products that Brian and I developed many, many moons ago. Frankly, as Brian mentioned, the remit at an investment bank is to develop indices that can help grow our trading volumes.  That often meant that indices were supporting the larger business, as opposed to being the revenue drivers.   For me, it’s exciting to join an organization like VettaFi, where our core focus is serving clients through innovative products and developing a sustainable business powered by our index products.  My goal is for VettaFi to become the premier shop that clients can rely on as a key partner.

The importance of history

Evan Harp: Samarth, you also have a history with these products, can you talk about your career and what led you to become part of VettaFi?

Samarth Sanghavi:  I  started my career at Lehman Brothers as a risk analyst.  A few years into the role, I went back to school to earn my MBA.  After that, I worked as a trader at Bridgewater Associates. Post-Bridgewater, I joined Credit Suisse in the Index Strategies team.  I started out as an Associate on the team, and by the time I left the bank 11 years later, I was running the global Fixed-Income business on behalf of the bank.

Evan Harp: Let’s talk about that 25-year history of these products. Can you speak to what that history means and why it's really interesting and useful?

Brian Coco: Not only do most of the products go back to the late 90s, but most of them were constructed in the early 2000s. They have not just a long history, but a long live track record of being computed and being modeled to represent those individual markets. I think there are only a few other products out there in the space that have that depth of history, especially in High Yield.

What's unique about this particular set is that it's not just the main index levels, but all the deep analysis underneath the covers. You can slice and dice the indices by ratings, sectors, maturity buckets, regions, countries, and other relevant aggregations.

The product line covers government bond indices in over 30 currencies. It covers corporate bond indices in major currencies, including investment grade and high yield within emerging markets - it actually covers credit really well as well. It's quite a broad offering that we're bringing to the table.

Closing thoughts

Evan Harp: In this particular market moment with where the fixed income space is, is there anything else that people should be aware of about these indices?

Samarth Sanghavi: These indices were designed to represent the market. As Brian said, they've been built in a flexible manner so they can be sliced and diced to cater to clients' custom portfolio needs. For those looking for high-quality benchmarks or looking to build bespoke exposures in Fixed Income, VettaFi has the capability to not only create that slice but to create that slice on an index that has a very long live track record so you can benchmark that to your products.

 

Key takeaways

One of the ongoing tailwinds for MLP performance is distribution growth. Distribution trends are very important for MLP investors, who often allocate to the space primarily for its income. Today’s note looks at distribution trends for the benchmark Alerian MLP Index (AMZ) and compares year-over-year distribution changes with index performance. Spoiler alert: MLPs tend to perform well when distributions are growing.

Understanding index-level distribution growth and recent trends.

VettaFi publishes a detailed recap of midstream dividends each quarter (stay tuned for the 4Q24 update next week). However, it can be helpful to look at changes in payouts over time at the index level through a simplified chart. AMZ is used here as our broadest MLP benchmark, but keep in mind, the Alerian MLP Infrastructure Index (AMZI) is a subset of AMZ.

To be clear, there can be different ways to calculate index distribution changes. The methodology used in the chart below compares what AMZ constituents are paying out on an annualized basis. It compares annual normalized total distributions with the prior year to calculate a percentage change. (Read more on the methodology here.)

Digging into the chart, distribution growth has clearly been strong in recent years. MLPs have historically focused on distribution growth, but trends have improved since an inflection in free cash flow generation that began in 2020/2021. In some cases, MLPs have been growing payouts after painful cuts made in 2020. Since July 2021, there has only been one distribution cut for an AMZ constituent. (USD Partners, which had a very small weight in AMZ at the time, suspended its payout in 1H23.)

AMZ: Y/Y change in normalized total distribution paid

While the data points from 2015 to 2020 are bleak (explained more below), it is important to note that MLPs have improved drastically over the last decade. Highlights include lower leverage and stronger balance sheets, a shift to self-funding equity capital, free cash flow generation, and widespread buyback authorizations instead of equity issuances (read more). Burdensome incentive distribution rights have been largely eliminated. MLPs are much better positioned today than they were during the oil downturn of 2014-16 or during the growth capital spending frenzy of 2018-19.

Why was 2015 to 2020 so bad?

Distribution trends were clearly lackluster from 2015 through the pandemic. Recall, energy was broadly under pressure from 2H14 until oil prices bottomed in February 2016 at $26 per barrel as OPEC fought U.S. shale for market share. While oil and gas producer MLPs are not currently eligible for AMZ, there were seven producer MLPs in AMZ at the end of 2014. Those names were quick to cut their payouts when oil prices fell. As their equities plummeted, they became ineligible for the index. There were no upstream MLPs in AMZ by late 2017.

Even in 2015, the vast majority of AMZ constituents were increasing or maintaining their payouts. For AMZ, cuts had an outsized impact as high-yielding producer MLPs were replaced by MLPs with lower yields. For context, normalized distributions for AMZI, which has never included producer MLPs, were only down 5.9% in 2015. Some larger MLPs cut their payouts in 2016 and 2017, but the impact on distributions was less pronounced because they were not replaced with lower-yielding names. Importantly, Enterprise Products Partners (EPD) and MPLX (MPLX) are examples of MLPs that have never cut their distributions.

Fast-forwarding to the pandemic, 16 AMZ constituents cut their payouts for the first quarter of 2020 (read more). Prior to this, the largest number of distribution cuts in a single quarter had been five. This helps explain the drastic drop in normalized total distributions shown above. In 2020, cuts generally came from names focused on gathering and processing or petroleum transportation with elevated leverage and below-average distribution coverage. These were largely small-cap names that were trying to shore up their balance sheets in an unprecedented energy macro backdrop.

Performance has been strongly tied to distribution trends.

Generally, MLPs tend to perform well when distributions are growing, but distribution cuts weigh on performance. The chart below plots year-over-year distribution changes since 2007 from the bar chart above with the annual price return of AMZ. When distributions are growing, price returns tend to be positive or nearly flat as highlighted in the top right quadrant. The Global Financial Crisis in 2008 marks the only exception (i.e., significant distribution growth with very weak performance), as shown in the lower right quadrant.

AMZ price return (Y-axis) vs. Change in normalized distribution (X-axis)

Typically, negative price performance coincided with lower distributions as cuts weighed on equity prices. This is particularly exemplified by 2015 and 2020, when the impact of distribution cuts was most pronounced, and AMZ performance was particularly weak. These examples are shown in the lower left quadrant.

There have been a few occasions since 2007 when AMZ saw positive price returns amid declining distributions. This was the case in 2009, 2016, and 2021, as shown in the upper left quadrant. In short, the index was rebounding after painful 35%+ price declines seen in 2008, 2015, and 2020.

Related: Why most MLP ETFs own less than 25% MLP

So what?

Investors often ask if the positive momentum in the MLP space can continue. Arguably, investors can likely feel good about future MLP performance if they expect distributions to continue growing. We believe the outlook for MLP distribution growth remains positive, as companies largely generate free cash flow and prioritize distribution growth. Additionally, companies are in a stronger financial position today given lower leverage, better balance sheets, and greater financial flexibility.

Of course, past performance does not guarantee future results. Looking at distribution trends alone as an indicator of MLP performance is admittedly oversimplifying. However, in the absence of a crystal ball, the outlook for distributions can provide helpful context for expected MLP performance.

AMZ is the underlying index for the JPMCFC Alerian MLP Index ETN (AMJB), the ETRACS Alerian MLP Index ETN Series B (AMUB), and the ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN (MLPR). AMZI is the underlying index for the Alerian MLP ETF (AMLP) and the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB).

This article was originally published February 25, 2025 on ETF Trends.

Recently, VettaFi CMO Jon Fee was interviewed by the CMO Network’s Jay Sen. The interview is available on the Content Marketing Virtual Summit Podcast.

“What got me into marketing was one part curiosity, and one part just pure luck,” Fee said at the top of the interview. Coming into marketing from more front of office roles, such as distribution, Fee was asked to take on additional marketing responsibilities. “The curious part of me loved the unknown of trying something new, but then also how much technology was being used back then even as it just relates to the birth and rapid expansion of the internet.”

How VettaFi leverages data to help issuers

Fee sees VettaFi as working primarily with issuers and asset managers. After explaining VettaFi’s role as an index provider is to help issuers develop products, primarily ETFs, Fee said, “the second thing we like to do is help those companies better understand who to bring those products to market to, who to target. And that’s where our data & analytics gets involved.” VettaFi has data & analytics products that can help issuers find quality leads, shorten sales cycles, and optimize their marketing efforts to reach the prospects most likely to convert.

“Common challenges that clients are trying to overcome include how to optimize their digital marketing online, using more data and analytics,” Fee said. “It's not uncommon for a lot of our clients to be operating with a mix of different marketing tactics, but not sure which ones to weight, one over the other.” He noted that data and analytics are particularly useful for unpacking which audiences are connecting with a product and which audiences need bolstering. Perhaps RIAs aren’t connecting. In such an instance, VettaFi’s data and analytics tools can help chart what marketing collateral is working well for those audiences and help issuers strategize their outreach efforts from there. 

If a given issuer wants to innovate a new product, VettaFi’s indexing capabilities come into play. “We’re constantly helping clients of all size,” Fee shared. “Through data, we help make healthier connections throughout the marketplace.”

Going on about go-to-market

Asked about his go-to-market strategy, Fee said, “core to any strategy within marketing or distribution has to be your go-to-market.” He offered three things to look at.

Are we achieving product market fit? If the product is new, it’s worth reflecting on whether or not you’ve cracked the code for untapped demand in the marketplace. Are the functions right? Is the product ready?

What are clients’ outlook? Buying journey is one thing, but understanding how clients feeel about the current market environment and changing regulations is essential. Understanding headwinds can help you understand what budgets might look like for potential clients. A lot of headwinds  can create challenges in generating new business.

What’s everyone else doing? Fee stated the importance of understanding what the competition is doing. “Are they innovating faster than you? Are they setting prices lower than you? Are they placing prices lower but actually giving up a lot of quality and value add that a client actually needs?”

Generating leads and building demand

When asked about his preferred channel for generating leads, Fee said, “everyone is looking for a silver bullet. But, spoiler alert, there isn’t really a silver bullet.” He shared that he likes thinking about his relationships with clients and prospects through the lens of friendship. Authenticity, dependability, and trust are all critical traits in a friendship. “You start to think more and more about how do you achieve that in a friendship, and you realize its not through a single touch.”

One phone call, email, or dinner does not deepenreal connections. Rather, a mix of those things over time does. Similarly, there is no one channel that will forge a true business partnership, but rather, the right mix of channels.

Content and distribution

The idea that “content is king” is something of a cliche in marketing, but Fee believes it to be true. “I believe it to be as true today as it was a decade or even two decades ago,” he said. The “how” has evolved and changed over the years. Ten years ago you might not be using social media, and twenty years ago you might not be using email as much. But the “what” goes back to the content.

“We’ve said historically that content is king in marketing. I think content is king in distribution.” Sales teams require sales enablement and a good talk track. That’s content, according to Fee. “Whether you are dripping it out through [email] nurture journeysl or making it snackable on social, content is still king because that is what you are putting in front of your clients.”

Fee sees the limitations of generative AI 

AI has been a buzz word throughout 2024. The technology has its champions and its skeptics. There’s no denying that it has invited curiosity and interest among many. “I play with AI almost every day as part of my daily routines of putting pen to paper and pushing myself to be a better communicator,” Fee shared. “What I’ve learned in using AI quite a bit this year is you can’t spell ‘plagiarism’ without ‘AI.’”

If content truly is king, Fee sees some issues with creating content using ChatGPT. Because generative AI relies on a pre-existing set of content, the content that it creates is neither genuine nor authentic.”You could be doing a disservice to your brand.” Fee noted that though you can get a short term win by creating content in seconds that might have taken longer, there is risk of long term damage, as the content will not be original.

Metrics: Finding the right Indicators of success, now or never

According to Fee, “You never really know the value of a creative campaign until it is in market.” Something could seem to have a lot going for it, but until it is in the market place you can’t really know whether it works. Fee noted that there are many metrics that can tell you a given piece of creative’s effect once it is in market. Did it get clicks? Did people stay on the page and see it through to the very end? “I think those metrics are fantastic and it’s taken a lot of the subjectivity out of whether or not the marketing is good, or at least it’s created a grounding.”

Fee took care to express that there is innate value in doing something creatively and artistically sound, but at the end of the day you need to drive growth, and these metrics help show that. “If you can’t measure it, you can’t manage it.”

Fee urges marketers to rally around two kinds of measurements: quality and quantity. “If you are only measuring the success of your website by the number of people who visit it, you’re only looking at quantity.” Getting people to show up is a success, but you need to think about the experience of being on that website. Are people immediately turned off and leaving, or do they want to stay and look at other things? “Time on site is fairly easy to measure.”

Branding challenges

Marketers face lots of challenges. According to Fee, one of the biggest challenges is just a lack of understanding of what marketing is and the value of marketing. “A lot of that lack of understanding of marketing or frankly of brand typically surfaces between functions in an organization.” Financial organizations might not understand why they need to spend on marketing, while sellers might not understand why things can’t happen on a certain timeline. Much of the friction within organizations around marketing is ultimately rooted in a lack of understanding. Fee advises that marketers should approach their colleagues in a similar fashion to how they approach a prospect. “You can not assume that people get how it all works together from a marketing perspective, so you have to take the time to educate folks on it.” A common lexicon is vital, and it takes time for people to understand why there is more to a brand than a logo. 

“I’ve heard this before, folks used to say ‘marketing is colors and fonts.’ That’s like saying selling is just cocktails and dinner!” Fee said. Creating a common lexicon can help create cross-functional opportunities and break through the friction.

Building a top-tier marketing team

Fee shared his belief that the most important decision any leader can make is who they hire and what they acquire. Acquiring anything, from another company to a new technology or service, can change the way that your team works. Fee says that people come first, though. “There’s an ongoing war for talent that I don’t see changing anytime soon.” Brands that hire the best people and get them working together will better set themselves up for success. “The [teams] that can align to common success metrics, align to how to work together in a work system, the teams that can be the most transparent and accountable to each other are the teams that are winning and will continue to win.”

Giving advice to new up and coming marketers, Fee underscored the importance of building a network from moment one of your career. Everyone you work with is in your network. “I can’t urge you enough to keep that network healthy and connected.” 

His final piece of advice is for marketers to “stay forever curious.” There will always be a way to do things better, and you need to be curious to be open to it.

Learn more strategies to sell your funds effectively by joining this upcoming free webcast.

Professional conferences present asset managers a host of opportunities. They are useful vehicles for connecting with financial advisors, showcasing thought leadership, and raising brand awareness. But every firm comes into a conference with a different set of opportunities.

Small and medium-sized firms share the conference floor with some of the largest industry leaders, creating enormous potential to codify your brand’s strength. Being present at the event, the brand status of a smaller firm gets a boost. But there are also unique challenges. Smaller firms come to conferences with less boots-on-the-ground than larger firms, and typically sponsor at lower tiers. With tighter budgets and less on-the-ground resources, smaller firms need to exercise their creativity and innovation to create memorable experiences for attendees.

Smart event activations create the potential for small firms to stand out amid big names. Understanding how to create and deploy a smart activation strategy can make a huge difference for these firms, as they look to spark growth.

Here are six tips for creating activation experiences that can further boost your brand and promote growth.

Align your activation with what your brand does and your brand identity

An event activation is an opportunity to express your brand’s values and personality. It can also express the purpose of your product. Deutsche Bank’s plain vanilla ice cream activation is a great example of how a brand used what the industry was calling “plain vanilla beta,” and created a fun idea that resonated among attendees. Vanilla might be a synonym for boring, but vanilla ice cream on a hot conference day is extremely welcome for many.

Larger brands need to cast a wide net. They typically have bigger budgets, but not necessarily the same wiggle room a small or medium-sized firm has. This limits some of their messaging potential, as they need to try and be all things to all customers. Smaller brands don’t have this obstacle, and they can find enormous success simply by expressing who they are and what they value in a meaningful and striking way. In other words, smaller brands have some permission to disrupt expectations and cater to niche markets with more direct messaging.

Brainstorming a smart activation means understanding your brand identity. What is your brand? How do advisors think about your brand, and is there a delta? If there is, how could you position yourself as the brand you want to be in your activation?

Be the talk of the conference by using new technologies

At Exchange 2024, Grayscale put on a laser drone show for attendees. This splashy activation leveraged drone technology to create an unforgettable spectacle for everyone present. As a cryptocurrency-focused asset manager, Grayscale didn’t just stick to the usual conference giveaways. Instead of sunglasses and water bottles, they delivered a full-scale laser show—using drones, lasers, and cutting-edge tech to create a brand experience that truly stood out, and aligned to their brand identity.

New technology can push budgets for smaller firms, but it's an investment that could pay dividends. Professional conferences are where your potential clients are gathering. Spending a little extra resources to create a memorable experience can be a vital component of how you transform your small firm into a medium-sized firm, or your medium-sized firm into an industry leader. Beyond driving content creation and brand awareness, cutting-edge tech activations hold real value in making your brand the highlight of the conference. New tech is always fascinating to people. Most people haven’t yet donned a VR headset. They don’t have a “moving headshot” and they probably rarely see drone laser shows. Look for interesting technology and a way to deploy it to create memorable experiences.

Build anticipation outside the event

Anticipation is a critical tool that storytellers, creatives, and marketers have leveraged throughout human history. Your favorite television series will frequently tease future events to build audience buy in. Foreshadowing is often employed in literature. Whether it is Shakespeare’s Macbeth, which features witches talking about Macbeth’s rise to power near the start of the play or Luke Skywalker having a vision in Empire Strikes Back that teases at the reveal of Darth Vader’s true identity in Return of the Jedi, anticipation can capture imaginations and draw in audiences.

Marketers use anticipation to build up hype. There are a number of hooks that can be deployed to create anticipation. Building anticipation in advance of an event is a powerful tool that small and medium-sized companies can deploy ahead of a conference to start building buzz. Something as simple as a countdown clock with no further explanation can have audiences immediately asking questions. What is this clock counting down toward? What will happen on the target date? The desire to understand draws audiences in. Many people find pleasure in cracking the clues before the main event.

Your firm may not be as widely known as other sponsors, but if you can get people curious about your upcoming presence as a conference, you’ll have helped make your impact greater before even setting foot in the space. This means announcing your presence as a sponsor early and then doling out tiny teases of what your activation might be to build excitement and anticipation.

Consider Gamification

Gamification is an easy way to drive interest. Human brains are hardwired to seek rewards, even if those rewards are purely symbolic. There are apps that give points for completing daily chores, and they are enormously successful because they work. Doing the dishes is a dull activity, normally. Award points for doing dishes, and suddenly people are motivated.

When you look at activations, gamification can generate buzz and promote discourse. If you have an ongoing trivia game (or something where you can display a leaderboard) as your activation, people will be interested. Their competitive nature will kick in, and they’ll want to “win” which only increases engagement in your activation. 

Put the audience first

It can be easy to get into your own head as you plan out your event activation. Something both small and large firms need to keep in mind, is that an activation is ultimately about the audience. You need to think through the experience of the activation from the attendees’ perspective. 

Imagine not knowing anything about your brand and activation. What would it be like to experience it? Is it engaging, informative, and interesting, or is it distracting and confusing? If it is the latter, how do you make it more engaging?

At the end of the day, an event activation needs to be in service of the attendees. Yes, you are communicating something about your brand, but to make the activation truly special it has to surprise, delight, and uplift everyone involved. Especially as a smaller firm, you want people to walk away from the experience having unambiguously had a great time.

Use the activation to capture interest

Activations have a ton of value from a branding perspective, but they can also be crafted to capture interest and identify leads for future nurture opportunities. 

One way to capture interest is by asking for information in exchange for a reward. This can be done ahead of the conference, to build hype and booth traffic, as well as during the conference at your activation. J.P. Morgan Asset Management did both. Its “Built to Last” activation asked financial advisors to upload a portfolio “built to last” into JPMAM’s digital portfolio analysis tool. The insights team analyzed it against key risk measures with the winning portfolio getting a complimentary interview with a media partner. 

This was also supported by using a steel booth (because steel is built to last) and pivoting away from low cost junk tchotchkes to things that are more robust or have more utility (phone chargers, metal water bottles, etc.) There was an engraving station at the booth which engraved these higher value giveaways live. This was used to capture advisor information, as they needed to submit details to get the live engraving. 

This activation followed every step in this tip sheet: it aligned with brand identity, it leveraged modern technology in the risk assessment tool, it built anticipation in advance, it gamified the event, and it created a fun experience for all participants. But the real clutch move was it captured concrete information and generated leads.

Final thoughts

Simply attending a conference has innate value. Firms that show up to a big industry event can set up business and get things done. But once you commit to attending, there’s no reason not to put in the extra effort and try to create a memorable experience aligned to your marketing goals. 

Taking a chance on a clever activation and thoughtfully executing it can attract attention, make your brand stand out, and capture concrete leads. The buzz also gives you social media fodder and something to write about in blogs and articles long after the event itself.

With the Exchange conference coming in March, you still have time to create a memorable activation that can put your brand in front of advisors. Looking to start bringing your event activation strategies to life? Our team can help you brainstorm and execute an activation strategy at Exchange.

In this month’s CMO Views, I connect with Karrie Van Belle, Chief Marketing and Innovation Officer at AGF Investments Inc. in Toronto, Canada. 

I’ve learned more talking to leaders one-on-one than I have reading books or staring at dashboards — and that alone says a lot because I love to read and I really love dashboards. I am a data guy, but as I continue to digitally transform professionally and personally, I find human connection more important than ever. We can learn so much from each other, and that’s why I’m excited to launch VettaFi’s CMO Views — built by marketers, for marketers. This look into some of the most brilliant minds in marketing will (hopefully) keep you entertained, inspire you, and teach you something you did not know. 

Karrie is a strategic driver of AGF’s digital transformation agenda, focused on driving efficiencies and enhanced client experiences for the firm, in addition to overall responsibility in leading the firm’s marketing and communications strategy across its diverse range of investment management platforms, and leadership of the firm’s product initiatives globally. Karrie has more than 20 years of marketing and communications experience rooted in the Canadian asset management industry. 

Jobs and careers — From first job to dream job 

Jon Fee: I think a lot about the difference between a job and a career. We all spend a huge slice of our lives working, and that time can drive satisfaction and growth, or it can leave us feeling disconnected and unhappy. What do you think is the difference between a job and a career?  

Karrie Van Belle: A job is something you go to from 9:00 to 5:00 for the paycheck, while a career is something that you are passionate about. A career is gratifying and something longer-term and evolutionary. A career should always provide you with opportunities for growth.   

Jon Fee: I completely concur. Tell us a little about your first job.  

Karrie Van Belle: I started working as a teenager and gained experience with typical jobs in fast food and retail. I even spent some time working on a tobacco farm. These first jobs taught me work ethic, responsibility, and independence.  

I was also a bank teller at Canada Trust. In many ways, I consider this to be my first real job. Looking back, the lessons I learned at this job have stayed with me throughout my career. My experiences taught me about the importance of engaging with clients, being transparent in my communications, and showing empathy. On any given day you did not know who was going to enter your branch, what their day had been like, and what their money situation was, and being able to deliver the client experience and service was critical despite how they may have been feeling when they came in that day. 

Jon Fee: What about your dream job? If you could pivot to a passion project as a dream job, what would it be?  

Karrie Van Belle: Anyone who knows me knows that I am passionate about sports and marketing. My dream job would be to combine these two passions. Advertising, as an interest and passion, for me, started at a very young age — I will always remember my grade six speech which focused on the role and impact of ads where I sang the Mr. Potato Head jingle at the front of my class. If you know me, you’re likely surprised to hear that I even had the nerve to sing in front of 30+ of my classroom peers. I am not a singer and I am introverted and quiet by nature, but this topic brought out my passion.  

Jon Fee: Oh my gosh — I would love to hear you sing the Mr. Potato Head jingle! What was your first job in marketing?  

Karrie Van Belle: My first job in marketing was with Edward Jones in Canada. It was a role that gave me experience as both a graphic designer and a writer. From there I continued to extend my learnings into new areas of marketing and communications including brand, advertising, market research, as well as digital and data strategy.  

Jon Fee: Marketing is constantly changing and evolving. Tell me about how marketing was defined when you first entered the field vs. how you, as a CMO, define it today.   

Karrie Van Belle: Previously, marketing was about making something look pretty or sound right. I think marketing has become more science than art these days. While not to diminish the creative aspect of our industry, I think marketers, now more than ever, are required to understand the data that is driving their end creative output. The CMO role itself continues to be elevated within firms, recognizing the role it serves in accelerating and understanding business strategy. We are seeing the evolution from a creative production house to a strategic partner.   

Pets and pet peeves  

Jon Fee: Probably the most important question I will ask you: Do you have pets?

Karrie Van Belle: For me, a home is not a home without a four-legged fur monster to come home to. My pets of choice are dogs, which I have had all my life. Growing up, I had beagles around the home, and since my first home with my husband, we have been proud lab owners. We first welcomed home a loyal and loving chocolate lab named Wendel, who gave us 14 perfect years. More recently, our home is filled by a soon-to-be three-year-old fox-red lab named Bowie, equally loving and loyal, able to play ball for hours on end, and notoriously believes he is starving in true lab fashion.   

Jon Fee: Bowie is stunning! To flip this “pets” section on its head a bit and tie it back to work, what about pet peeves? What annoys you the most in the workplace?   

Karrie Van Belle: My biggest pet peeve is when people don’t take the opportunity to learn from their mistakes.   

I encourage people to take risks. But if the risk doesn’t pay off, they need to be willing to learn, grow, and not repeat the same mistake. My other pet peeves include people talking over each other, not being transparent, having to repeat myself (which might be because I speak so quietly), and a messy desktop.  

Lessons in leadership

Jon Fee: Let’s talk about leadership. What daily habits or weekly routines do you have that keep you sharp as a leader and evolving as a marketer?  

Karrie Van Belle: As a leader, I always ask a lot of questions. I never think I’m the smartest person in the room, and frankly never am, and that allows me to ask questions.   

I believe in always being curious. I’m willing to question the status quo, which is something you need to do to grow and learn.   

Of course, it’s also important to challenge yourself to do better. You can never be complacent if you want to evolve as a leader.   

Jon Fee: That’s so true. The moment you think you have everything figured out is the moment you start making mistakes. Is there something you can point to (a book, an experience, a person) that has helped keep you moving and evolving, and had a big role in shaping your leadership style?  

Karrie Van Belle: I feel fortunate that throughout my career I have had exposure to great leaders, mentors, and training programs.   

It has been a gift for me to be around leaders that challenge me and make me think differently. At the same time, the training programs I participated in gave me permission to invest in myself and use the resources to develop as a leader.   

I have also worked with some great agencies, and looking back, those relationships really taught me the ropes — especially when it came to learning the advertising side of the business. These relationships still exist today, and I have a network of people I can call to bounce ideas off of or to get advice.   

Throughout my career, I have worked with a lot of smart people. They have challenged me and really given me the opportunity to learn and grow as a marketer. As a result, I am committed to giving my team members the same experiences including the opportunities to develop and evolve.   

Digital transformation 

Jon Fee: That’s an incredible answer, thank you! For the next section, I want to talk about digital transformation. This is a challenge I love to ask of marketers: Describe digital transformation without using the words digital transformation.   

Karrie Van Belle: It is about using emerging data in different ways to accelerate change. It’s about using data and insights to drive efficiencies and improve the client experience.   

Jon Fee: Good answer. What is something in this space that nobody is thinking about?   

Karrie Van Belle: I think something that everyone needs to think about or be aware of is that when it comes to digital transformation, you will always be playing catch up.   

By the time you’ve thought of something, it’s already old. And the reality is that you need to be okay with this. Digital transformation is about evolving, and you need to move forward even when it feels like you’re playing catch up.  

Giving back  

Jon Fee: We’re big on community in VettaFi, and personally, I always find one of the best expressions of community to be volunteerism. Tell me about your volunteerism and giving back to make a greater impact.   

Karrie Van Belle: Giving back is very important to me, especially when it comes to supporting initiatives related to financial literacy and education.   

When I was a teenager, I had a family friend go above and beyond to help me save money. Her gesture set me up for success as I was preparing for university. I will never forget what she did for me or the lessons I learned.   

As a result, I am passionate about supporting organizations that help set students up for success at an early age.   

I have recently been involved in Junior Achievement and the Merit Award Bursary.   

Junior Achievement is the world’s largest not-for-profit organization dedicated to educating young people about business. Their programs are focused on financial literacy and emphasize the advantages of staying in school and how this choice can positively impact future dreams and career choices.  

Similarly, the Merit Bursary Award works to inspire high school students to continue their education while recognizing the contributions they’ve made to their communities.  

Jon Fee: I know we saw each other down at the Exchange conference. I’m over the moon to share that Exchange attendees volunteered 130+ hours and we contributed over $50,000 to the Susan G. Komen Foundation, The Surfrider Foundation, and JA Worldwide (Junior Achievement). 

Crystal ball - What's next for marketers

Jon Fee: I love that you can recognize how people have lifted you and are endeavoring to do the same for others. We’re coming into the home stretch here, and I’d love to cast our gaze on the future. Thinking one to five years out, tell me about your predictions for marketing and marketers. What’s coming next? How do we prepare?

Karrie Van Belle: If only I had a crystal ball. While I don’t have a prediction, I would say to all marketers to strap in as it is going to be a fun, fast, and bumpy ride. I don’t think anyone can know what is coming next, so you just have to remember to be nimble, agile, and open to the unknown.  

A parting gift from Belle

Jon Fee: Karrie, it has been amazing talking with you. As we reach the end of this CMO View though, I’d love for you to leave a parting gift for our readers. Can you share with us an album, book, movie, TV series, or other creative work that brings you joy right now? Also, tell us what is it about this creative work that fires you up. 

Karrie Van Belle: When it comes to a TV series, I highly recommend “Ted Lasso.” As you probably know, it is a show about an American football coach who is hired to manage a British soccer team. I was a fan from the very first episode and couldn’t wait to keep watching.   

My family enjoys anything sports-related, but I was also drawn to the show because of Ted Lasso’s positive attitude. There isn’t another character like him on TV, and he’s being recognized for his leadership style. In fact, there are articles about how the character is reinventing leadership and proving that nice leaders can finish first. It’s all very refreshing and reminds me of the lessons I learned about engaging with others, being transparent in my communications, and showing empathy in my first job as a bank teller.   

And when it comes to books, I’ve always been a fan of Douglas Coupland. While Ted Lasso is redefining leadership, Douglas Coupland literally defined a generation with his book “Generation X.”

He is a Canadian short story writer, essayist, and visual artist, but it’s his books that have really left an impression on me. Some of my favorites include “Shampoo Planet,” “Microserfs,” and “Girlfriend in a Coma.”

Through his work, he has been recognized as one of the most original commentators on mass culture of the late 20th and 21st centuries.   

Follow Karrie Van Belle on LinkedIn.

This article was originally published on March 14th, 2023 on ETF Trends.

 

A new era for defense

Global defense spending reached an all-time high of $2.4 trillion in 2024, rising 6.8%, which represents the steepest increase since 2019. Beyond the heightened demand being created by prolonged conflicts in Ukraine and the Middle East, is the need for equipment modernization and increased spending after many years of underinvestment.  

Global Military Expenditures 2013 - 2023

The “Peace Dividend” era when countries could focus on domestic programs instead of military defense spending is over. Among NATO member countries, the 2% of GDP spending target has been another driver behind increased spending. With 23 of NATO’s now 30 member countries (Finland and Sweden joined since Russia’s invasion of Ukraine) meeting the 2% of GDP target, higher targets are being proposed. The European Union has proposed an increase to 3% of GDP, while the Trump Administration is demanding an increase to 5% of GDP. Regardless of the end spending target percentage, the trend for spending on defense is moving higher to the benefit of defense stocks. 

Modern defense story

In addition to more spending, the kind of spending is also changing in favor of modern approaches that leverage technological solutions over more boots on the ground.  Cyberspace has become a new military domain in addition to land, air, and sea. This translates into more spending in areas such as artificial intelligence, robotics, unmanned vehicles, drones, cyber defense, and other modern defense solutions. 

VettaFi’s Global Defense Leaders Index

VettaFi’s Global Defense Leaders Index (VGDEF) tracks the market performance of companies listed globally in select exchange countries that provide exposure to the national defense industries of NATO and major non-NATO ally countries. Global military spending among NATO members and its allies has accelerated in response to rising global aggression around the world and the rising need for modernized defense solutions. NATO members currently comprise 55% of the world’s military expenditure.

Companies in the index are exposed to global defense spending such as military aircraft, defense equipment, and future of defense technologies stand to benefit from increased spending levels and the need for modern defense solutions like autonomous vehicles, counter drone systems, and artificial intelligence.  

The largest holding in the index is AI big data analytics firm Palantir Technologies which was the top-performing stock last year in the S&P 500, up 340%. Rising military spend and increased order backlogs are driving outsized returns among defense and defense technology companies.  

Changing story requires change in exposure

Our Index construction methodology provides exposure to the changing realities of modern defense, holding both traditional defense players and companies on the bleeding edge of modern defense technological innovation. While past performance is not indicative of the future, our index approach has delivered strong returns relative to traditional defense indexes and those focusing on technology alone. 

If you would like to learn more about VettaFi’s new Global Defense Leaders Index (VGDEF), please reach out using the form here.

Setting the right tone for a new year is critical to any brand seeking sustainable growth. Here are four things you can do to boost the effectiveness of your marketing campaigns and position your brand for long-term success.

1. Commit to the full-funnel campaign

After launching a new campaign, a common mistake brands make is pivoting before the campaign can truly begin to pay dividends. Flows may seem static for weeks or sometimes months after launching a campaign. But this is normal as it takes effort and time to drive conversions at scale. All prospects are different and so are their digital journeys. They may need to see your brand logo, hear about the product multiple times, and perhaps see the ticker referenced in media before they even research and consider your product.

Building brand awareness is a marathon, not a sprint. It requires multiple touchpoints and continuous effort over an extended period. At the same time, full-funnel marketing means giving every part of the funnel attention to set yourself up for ongoing success. It’s common to want to concentrate resources on lower funnel tactics as they can more easily tie to revenue. In the short term, this can help with boosting a few key metrics, but it comes at the cost of ignoring the rest of the funnel and harms your long-term success.

Time-tested awareness tactics, like display ads, have a place. Your campaigns should be built with all stages of the funnel in mind with tactics deployed in each stage - awareness, interest, consideration, and intent. Focusing on a well-rounded campaign will help generate long-term success and build consistent lower-funnel opportunities.

2. Complement digital campaigns with in-person event sponsorships

The world might be increasingly digital, but that has only increased the value of live events. Connecting with clients and prospects in person can be the differentiator in moving a prospect through your funnel and building brand loyalty. 

An event that happens early in the year, like the Exchange Conference, gives you a chance to showcase your thought leaders and make real connections with advisors - both clients and prospects. Event sponsorships can fuel content for future marketing efforts. Aside from the live connections, they can also be leveraged to generate additional digital content. Write-ups, recaps, and deep dives about topics brought up at the event can provide quality content opportunities.

Studies also indicate that combining in-person events and digital efforts is more effective than digital marketing alone. Event activations can help reinforce your digital campaign messaging, bolstering brand awareness and consistency across mediums and platforms. 

3. Improve your data game to sharpen prospecting efforts

Once prospects are ready to convert, they’ve likely conducted their own research. With the right approach to data, including a good blend of first- and third-party data, you can get a picture of which prospects are ready to purchase, and which ones aren’t as progressed in their journey through the marketing funnel.

Optimizing the efforts of your sales team relies on quality data. For example, a prospect could be interacting with content, clicking through emails, and even doing research for similar products. If your sales team has the ability to see this information, then they can strike at an opportune time to make the conversion. But if this data is obscured from sales, they might not know how to best prioritize their reach out. Putting time and energy into leads that are actively on the cusp of making purchasing decisions instead of on cold calls can boost sales efficiency. The key is leveraging the right advisor data, prioritizing actions, and delivering the information directly to sales.

4. Develop products that resonate with investors, with the right partners

Some issuers are concerned about product saturation, fearing they should be conservative with new products. The ETF marketplace is indeed more crowded than ever. However, fear-mongering about the oversaturation of the ETF market has been a constant refrain. It happened when there were only 100 ETFs and when there were 1000. New products to solve investor problems will always have a place in the market. You shouldn’t pump the brakes on product development, you should be looking for the right partners to help create useful products that solve client problems.

The right partner is responsive and provides cost-effective services and solutions to your indexing needs. Your index should accurately capture the part of the market you are seeing opportunity. Additionally, your index partner should be able to rapidly backtest and come up with smart solutions and ideas. The right partner will not only help your design and build your product but also assist you through launch and as you scale.

Learn more: 7 ETF marketing tactics to attract investors

Let us help you get ahead

Planning ahead is always useful, and there’s still time to set yourself up for success in 2025. VettaFi can help issuers on several fronts. The Exchange Conference is one of the most valuable financial advisor-centric events of the year and happens in March. VettaFi’s index factory can help you create new products or benchmark existing funds more efficiently. With a variety of digital marketing and data services, VettaFi can be a go-to, one-stop shop for issuers.

Learn more here.

It's hard to believe it, but I've been going to industry conferences for about a decade. 

Prior to my role at VettaFi, I worked for a major asset manager running their U.S. ETF marketing efforts. Sponsoring and attending in-person events was a key component of our distribution strategy. Initially, this meant attending multiple smaller industry events as we tried to gain initial traction. Eventually the focus narrowed to a few larger key events, such as Exchange, and showing up in bigger ways as our ETF suite picked up momentum, ultimately growing to over $20 billion in AUM at the time of my departure.  

Now, in my current role, I'm part of an organization that produces a large financial services conference. In its fourth year, Exchange is an annual event that brings over 1,900 members of the financial services community together - and a large part of being able to make an event on this scale is through our sponsors.

As such, I’ve been on both sides of the sponsorship equation. I have been both a sponsor of a big event as well as the host of a conference. I've seen my fair share of event activations spanning various sizes - small, medium, and large. Here are three of my favorites. 

P.S. This is a personal opinion and not a representation of the firm’s view. All of our sponsors and partners are highly valued. I just want to share what spoke to me specifically.

Deutsche Bank’s plain vanilla activation 

This was several years ago - but here's what I remember: It was at an industry conference; every inch of the hotel was sold for branding. The big issuers with the big bucks had secured the big branding opportunities, and it was hard to break through the noise and stand out.

It was also a time when all the buzz was about “smart beta.” What is it, will it last, is it just a fad? Passive beta was old news.

Deutsche Bank faced this challenge head on by using their 10x10 booth in an innovative, creative way. They decided to make their space work as hard as possible for them, in a (I imagine) fairly cost efficient way that could create buzz for their own firm, reinforce their products, and create a value exchange with attendees. 

Instead of filling their booth space with a pull up banner, a table, bored sales reps, and printed material, they brought in a small, branded cart and served vanilla ice cream. This created a buzz amongst attendees. 

The campaign messaging was oriented around their passive index suite, often deemed “plain vanilla beta,” in the industry. The activation was a play on the fact that while passive funds may be considered “boring” (aka plain vanilla), they are still a tasty option for your portfolios. 

Who doesn't like a nice afternoon treat? The activation created a value exchange with attendees through the offer of ice cream. “I remember eating various ice creams near their stand and talking to Fiona Bassett about it,” said Michael Camacho, head of U.S. wealth at UBS. 

Through the fog of time, I can't remember if they had toppings there to make sundaes. If they did, they could've taken the analogy even further, noting that plain vanilla funds (aka vanilla ice cream) are solid foundations for portfolios (for sundaes). 

Regardless, it was a cost-effective way to stand out in the crowd. The fact that it represented their product line up in an interesting, creative way makes it a top activation in my book - and other people share my opinion here. Julia Stoll, vice president at Goldman Sachs Accelerator said, “I… thought the campaign was brilliant.” 

J.P. Morgan Asset Management’s built to last experience 

This next activation is a personal point of pride, as it was the last and my favorite event sponsorship I planned and executed while at J.P. Morgan Asset Management (JPMAM). 

JPMAM’s brand is rooted in being a portfolio solutions partner; partnering with clients over time, and building products for investing over the long term. And so the campaign idea was generated with the phrase, “built to last, with your future in mind.” This concept was then threaded through the whole event experience.

Ahead of the event, we asked attending financial advisors to upload a portfolio “built to last” into JPMAM’s digital portfolio analysis tool and had the portfolio insights team analyze it against key risk measures. Not only is this a great lead capture opportunity, but advisor participation also fed the broader set of portfolio data. The winning “built to last” portfolio received a complimentary video interview with a media partner.

Outside of JPMAM ETFs, what is built to last? Steel. The traditional booth was made sexier with a metal reskin and metal accents throughout. For swag, we wanted to move away from the low cost tchotchkes sponsors provided in the past. As someone that is constantly purging my environment of clutter, I rarely grab swag and most seem beyond wasteful. We wanted to provide swag that was, well you get it by now, built to last. We sourced a selection of reusable options, including metal water bottles, luggage tags, and portable chargers.

In tying with the personalized touch that the JPMAM team provides, we brought in an engraving station at the booth so attendees could get their personal information engraved into their choice of metal swag. This was also a lead capture mechanism, as advisors had to “sign up” to participate in the engraving portion.

“Years later, and I still use my JPMAM water bottle and luggage tag today!” Noted Brian Coco of VettaFi. 

Lastly, we held a dedicated breakfast for financial advisors at the event. To break through the email noise that sponsors create ahead of the event, we physically mailed advisor registrants a printed invitation. The breakfast session featured portfolio construction experts walking through common portfolio scenarios of the time, providing them with guidance on how to construct a portfolio that is … built to last! Also, it was another opportunity to identify leads, as attendee information was captured when they participated in the session.

Why am I proud of this activation? The answer is two-fold. First, the campaign concept was threaded throughout for a focused, consistent message, and experience; the activation reinforced our brand and product line up. Second, we put in the work to create opportunities to connect with advisors at the event. An event can generate business opportunities - if you work it right!

Grayscale’s drone show

Want to break through the sponsorship noise and capture attendees attention? Sometimes spectacle is the answer.

At Exchange 2024, Grayscale coordinated a drone show in the night sky of the outdoor closing reception. 

For spectacle to succeed, it truly needs to impress and Grayscale did not disappoint. I've never seen hundreds of drones flying in a choreographed fashion in perfect coordination. Creating a visual representation of a bitcoin symbol, blockchain technology, the Grayscale firm name and their ticker would have been impressive on its own, but it was also paired with music and brilliantly choreographed. It was dare I say… beautiful and oddly moving? Plus, everyone of the thousands of attendees grabbed their phone and took photos of the activation. 

Talk about owning a moment with 100% SOV, attendee penetration and attention. Grayscale also complemented their splashy event with digital buys at local airports, following attendees from home base to the conference to build buzz and excitement before they even arrived. 

Their booth was visually stunning, to add to the strength of the entire execution. This is a minor detail, and many firms would have skipped on putting time and effort into their booth and instead relied on the spectacle of the drone show to carry their branding, but this care and attention to detail matters and lifts the entire experience.

What to remember

You can make an impact at an event no matter how small or large your budget. What’s important to remember is:

  • Figure out an activation idea or theme that is representative of your brand and core product offerings. Something that works to strengthen your message, versus distracts with an unrelated concept. Thread it throughout your whole experience. 
  • Think outside of the box to break through the noise other sponsors inevitably create. Go beyond traditional sponsorships and what sponsors typically do.
  • You want leads? Generate opportunities throughout your conference presence to capture them! Want brand exposure? Pick a primary goal and construct your sponsorship and presence to achieve it.

The healthcare sector is on the cusp of a transformative period, fueled by technological advancements, shifting demographics, and a growing emphasis on controlling continuously increasing costs. As we navigate the post-pandemic landscape, the outlook for the industry remains cautiously optimistic, with several key trends shaping its future. This article focuses on those developments, highlighting key drivers of growth and how the Healthcare Technology and Innovation (HTEC) index is strategically positioned to capitalize on these emerging opportunities.

Technological Advancements and Precision Medicine

The Shift Towards Personalized Care

The industry is increasingly embracing precision medicine, a transformative approach that tailors treatments to individual patients rather than relying on a one-size-fits-all model. This shift is largely driven by:

  • Genomics: Advances in genomic sequencing enable a deeper understanding of genetic predispositions to diseases, allowing for more targeted therapies.
  • Artificial Intelligence (AI): AI algorithms analyze vast datasets to identify patterns and predict treatment outcomes, expediting the drug discovery process.
  • In Silico Drug Development: Testing drugs through computer simulations accelerates clinical stages, reducing time and costs associated with traditional lab testing.

These innovations not only enhance treatment efficacy but also open new avenues for tackling complex diseases.

Harnessing an Abundance of Data

Unlocking Insights for Better Healthcare

An unprecedented influx of healthcare data is being generated from previously unavailable health records, wearable devices, and genomic studies. When fully harnessed through advanced analytical tools, this data can lead to:

  • New Treatments: Identifying novel drug targets and therapeutic pathways.
  • Enhanced Methodologies: Improving diagnostic accuracy and personalized care plans.
  • Predictive Analytics: Anticipating disease outbreaks and patient readmissions, allowing for proactive interventions.

Companies investing in big data analytics are better positioned to revolutionize healthcare delivery and outcomes.

Addressing Rising Healthcare Costs

Efficiency Through Innovation

With healthcare spending accounting for 16.6% of the U.S. GDP in 2022, there’s a pressing need to reduce costs. Companies within HTEC are leading the charge by:

  • Utilizing Robotics: Automating surgeries and routine tasks to improve precision and reduce labor costs.
  • Implementing Process Automation: Streamlining administrative and clinical processes to minimize errors and increase efficiency.
  • Leveraging Data Analytics: Optimizing resource allocation and identifying cost-saving opportunities.

These efforts aim to make healthcare more affordable without compromising quality.

Catering to an Aging Population

Meeting the Needs of a Demographic Shift

By 2050, projections indicate that one in four people in Europe and North America will be aged 65 or older. This demographic shift will:

  • Increase Demand: Higher need for diagnostics, chronic disease management, and regenerative medicine.
  • Strain Resources: Necessitate more efficient healthcare delivery models.
  • Drive Innovation: Encourage the development of treatments tailored to age-related conditions.

Companies focusing on age-related healthcare solutions are poised for growth as they address this expanding market.

Expanding Focus Beyond GLP-1 Treatments

Tackling a Broad Spectrum of Health Issues

While GLP-1 receptor agonists like Novo Nordisk’s Ozempic have grabbed the spotlight with their treatment of obesity, other prevalent health issues remain:

  • Heart Disease: Leading cause of death globally, requiring innovative interventions.
  • Stroke: Advances in rapid diagnosis and treatment can significantly improve outcomes.
  • Cancer: Continuous need for breakthroughs in detection and therapy.

Diversifying beyond current trends ensures a comprehensive approach to global health challenges.

The Healthcare Technology and Innovation Index – HTEC:  Strategic Positioning

Capitalizing on Market Conditions

HTEC is uniquely positioned to benefit from favorable market trends through its focus on key innovations:

  • Robotics: Enhancing surgical success rates and increasing the number of surgeries a surgeon can perform, leading to better patient outcomes.
  • Genomics: Accelerating drug development and enabling early disease detection with technologies like liquid biopsies—a simple blood test for cancer.
  • Artificial Intelligence: Revolutionizing drug discovery processes, which can lead to massive savings by increasing the success rate of treatment approvals.
  • Process Automation and Data Analytics: Reducing costs and improving efficiency across the healthcare chain by optimizing operations.
  • Regenerative Medicine: Developing methods to repair and grow organs, crucial for an aging population.

By investing in these areas, HTEC is at the forefront of addressing the industry’s most critical challenges and opportunities.

Conclusion

The healthcare sector is entering an era of transformative growth driven by technological advancements, data utilization, and the need to address rising costs and an aging population. Positive macroeconomic trends are gaining momentum, providing additional tailwinds that support the industry’s expansion. Companies within HTEC are not just adapting to these changes—they are leading them. For investors and stakeholders, HTEC represents a compelling opportunity to participate in the future of healthcare innovation and reap the benefits of an industry poised for significant expansion.

This article was originally published September 23rd, 2024 on ETF Trends. 

Understand the Post-2025 Landscape: See how emerging policies—from the Biden administration’s AI Executive Order to shifting immigration rules—may accelerate robotics and AI adoption across U.S. industries.

Pinpoint Key Sectors Under Pressure: Discover which areas (construction, manufacturing, agriculture, logistics) face intensifying labor shortages and how automation can fill the gaps.

Forecast the Next Automation Cycle: Identify the policy tensions and structural reforms that could set off a sustained wave of robotics and AI implementation, reshaping supply chains and operational models.

Develop Forward-Looking Strategies: Learn practical ways to spot early movers, broaden your focus beyond mega-cap names, and stay ahead as these technologies reshape the economic landscape.

Looking ahead to 2025, American industry stands at a crossroads, with a policy landscape that appears increasingly favorable for robotics, automation, and AI. The groundwork laid by initiatives like the Biden administration’s AI Executive Order—encouraging broad adoption of AI across government—suggests that further policy shifts could accelerate these trends. At the same time, structural challenges and potential reforms across areas like trade and immigration are converging, creating both obstacles and unprecedented opportunities. 

As domestic manufacturing regains focus and interest rates trend lower, the stage is set for one of the most significant automation cycles in recent memory. Thus, we expect to see a reshaping supply chains, labor practices, and competitive dynamics as American businesses adapt to a new era.

Pent-up capacity & labor constraints:

Manufacturing, construction, and logistics sectors have long awaited greater policy clarity and reduced regulatory friction. Add to this the possibility of new tariffs and potential deportation of undocumented immigrants—who currently comprise a substantial portion of the workforce in agriculture, construction, and processing facilities—and you have a scenario where labor shortages are likely to intensify. Under such conditions, robotics and AI solutions become not only economically attractive, but strategically essential.

I recently discussed these “less obvious” Trump trades on Bloomberg News Network (BNN). While Bitcoin’s recent price appreciation has drawn early attention, the more sustained and impactful story may be in automation and robotics. Watch the segment here.

Key sectors for automation adoption:

  • Construction & Manufacturing: These industries already face a tight labor market. If immigration policies further restrict the labor pool, the incentive to invest in robotics and AI-driven machinery becomes even stronger.
  • Agriculture & Food Processing: Approximately 42% of U.S. farmworkers are undocumented. Any significant reduction in this workforce could disrupt entire supply chains. Advanced harvesting robots, autonomous tractors, and AI-assisted processing lines will help maintain efficiency and output.
  • Logistics & Warehousing: A push toward domestic production—coupled with a diminished labor force—intensifies the need for automated distribution centers, AI-driven inventory management, and autonomous logistics solutions.

Policy tensions & possible paths forward:

There’s a clear tension between policies aimed at reshoring manufacturing, reducing inflation, and constraining certain labor pools. While proposals like streamlined green cards for STEM graduates might fill some specialized roles, they do not solve the larger labor gap in more labor-intensive sectors. Some form of vetted, solution-oriented immigration policy could help, but in its absence, robotics and AI stand ready to bridge the gap.

A potential automation supercycle:

These developments could catalyze a long-anticipated “supercycle” of automation. TSMC’s Fab 21 in Arizona has exceeded yield expectations, demonstrating the viability of high-tech manufacturing in the U.S. I discussed Fab 21 in more detail on Schwab Network TV. This success, paired with the potential policy shifts, may encourage further onshore development and larger-scale adoption of robotics and AI-driven production lines.

Consider Foxconn (Hon Hai), which reported strong results and significant progress in the AI server market. In partnership with NVIDIA, Foxconn is developing substantial server manufacturing capacity in Mexico, diversifying its operations and tapping into new growth areas. Amazon, meanwhile, is advancing its own AI chip initiatives to reduce dependency on a single vendor. Similarly, ASML projects robust long-term growth—despite near-term regulatory hurdles—anticipating a trillion-dollar chip market by 2030. Collectively, these moves suggest that value creation will extend beyond a handful of mega-cap names to a more diverse range of ecosystem players.

ROBO and THNQ: Capturing the full opportunity set:

We cover these two areas of physical automation and artificial intelligence, which are poised to benefit from ongoing policy shifts and industry transformations. The ROBO Global Robotics & Automation Index (ROBO) and the ROBO Global Artificial Intelligence Index (THNQ) track a broad range of participants in these ecosystems—integrators, component suppliers, software platforms, and enabling technologies—rather than concentrating on a few dominant names. With lower interest rates and the potential for increased M&A activity on the horizon, smaller and mid-cap innovators included in these indices stand to gain from growth and consolidation opportunities across the sector.

Importantly, this narrative goes well beyond the immediate headlines surrounding cryptocurrency rallies or the dominance of a handful of high-profile AI companies. The deeper, more enduring story into 2025 and beyond is the structural, economy-wide embrace of robotics and AI. By examining the full spectrum of companies represented in ROBO and THNQ, we can identify how these sweeping shifts in labor markets, regulatory environments, and supply chains are creating a lasting foundation for one of the most significant technological growth themes of the coming decade.

This article was originally published December 11th, 2024 on ETF Trends.

There may be no such thing as a free lunch. But for midstream, there can be instances where operating leverage allows for additional cash flow with little-to-no capital spending. A prime example would be an existing pipeline that is not fully utilized. Across midstream asset types and geographies, companies are pointing to the benefits of operating leverage or very capital-efficient growth. This note highlights a few examples and explains how operating leverage benefits midstream.

Natural gas volumes could rebound quickly if prices improve.

Natural gas production in the US is arguably a loaded spring for midstream gathering and processing assets once prices recover. Multiple gas producers shut in production this year due to weak prices. Essentially, it was better to keep natural gas in the ground than to sell it at depressed prices and worsen market oversupply. Some production has likely returned with seasonal price improvement. But more volume could be added relatively quickly if prices are supportive.

On their 3Q24 earnings call, Williams (WMB) discussed 4 billion cubic feet per day (Bcf/d) of natural gas production across their systems in the Marcellus and Haynesville that was connected but not producing. Management noted that some production curtailments from the summer were starting to come back. And production could rebound fairly quickly when prices improve, in some cases just requiring the turn of a valve.

Similarly, Kinder Morgan (KMI) noted plenty of capacity on gathering systems in the Eagle Ford if volumes ramp, though KMI would probably need to add processing capacity. In the Haynesville and Bakken, they would likely need to add lateral pipelines to connect into their larger existing pipelines. But they see the potential for efficient expansions for their gathering and processing businesses when production picks up.

Permian: More bang for the buck at each well site.

In the Permian, pipeline operators can enjoy operating leverage as producers become more efficient and drill more wells at existing pads. Efficiency gains by producers have been significant as noted by Plains All American (PAA/PAGP) in a recent interview with VettaFi, and drilling technology continues to improve.

Higher recoveries and larger developments mean gathering companies can utilize existing infrastructure and make fewer new connections. On their 3Q24 call, Plains noted that close to 40% of their gathering connections in the Permian already have pipelines and facilities in place. This capital efficiency has been ongoing for years and is expected to continue. Plains is forecasting that Permian oil production will eventually exceed 7 million barrels per day. That’s up from ~6.4 million barrels per day at year-end 2024.

Canada: New takeaway capacity supports production growth.

Earlier this month, Canadian midstream corporation Keyera (KEY CN) provided a multi-year EBITDA growth outlook largely underwritten by filling existing capacity. Infrastructure assets, including gas processing plants and pipelines, are expected to see increased utilization over time as Canadian energy production grows. Specifically, KEY guided to a compound annual growth rate of 7-8% for fee-based adjusted EBITDA from 2024 to 2027.

Production growth in Western Canada is supported by new incremental pipeline takeaway capacity for oil and natural gas, namely from the expansion of the Trans Mountain Pipeline and TC Energy’s (TRP CN) Coastal GasLink, respectively. Additionally, KEY highlighted increased drilling activity due to new land owners and the development of emerging plays. The company also plans to pursue capital-efficient growth projects. But most of the expected EBITDA growth is simply a matter of filling capacity with only modest capital required.

So what?

For midstream, major projects tend to garner more attention and are often more needle-moving for cash flows. That said, operating leverage can provide meaningful benefits as production grows. The ability to enjoy increased cash flows with modest or no capital spending is a good example of the value in existing pipelines and other infrastructure. Growth with little capital spending should be welcomed by investors.

This article was originally published December 19th, 2024 on ETF Trends.

Summary

MLPs have made significant changes for the better over the last decade, including reducing leverage, eliminating burdensome incentive distribution rights, and focusing on sustainable distribution growth.

Widespread free cash flow generation among MLPs has supported distribution growth and opportunistic buybacks.

Despite drastic improvements over the last decade, MLP EV/EBITDA multiples remain below long-term averages.

Many investors may be considering MLPs for the first time ever or the first time in many years given a reestablished track record for strong performance and steady distribution growth. Interest in midstream/MLPs has seemingly strengthened following the election. Today’s note is geared toward investors that may not be aware of the significant positive changes that have taken place over the last several years, including free cash flow generation, improved balance sheets, and equity buybacks. For new or returning investors, our MLP Primer may also prove a helpful resource.

Hefty spending replaced by free cash flow tailwinds

Investors may be surprised by how much MLPs have outperformed the S&P 500 in recent years. From the end of 2020 until December 10, 2024, the Alerian MLP Infrastructure Index (AMZI) has generated a total return of 194.4% compared to 70.6% for the S&P 500.

One of the major tailwinds for energy infrastructure MLPs since 2020 has been widespread free cash flow generation (read more). MLPs invested heavily in new infrastructure during the 2010s as US energy production boomed, building major pipelines with billion-dollar price tags and often issuing equity to help fund growth. Self-funding equity capital started to gain more traction in the MLP space in 2017-18, and equity issuances became less common. In 2020, the combination of reduced growth capital spending and new cash flows from completed projects drove a free cash flow inflection. Rather than issuing equity, MLPs began repurchasing equity.

In recent years, moderate US oil and natural gas production growth has required less infrastructure. Instead of building new projects, companies have often been able to expand existing assets like pipelines or export terminals resulting in more capital-efficient growth. This has helped keep capital spending in check, supporting free cash flow. According to Bloomberg, AMZI’s free cash flow yield as of December 13 is 8.2% compared to 2.7% for the S&P 500.

High leverage replaced by balance sheet strength

In the 2010s, hefty growth capital spending resulted in elevated leverage. A decade ago, it was common for MLPs to have leverage around 5x on a net-debt-to-adjusted-EBITDA basis. In addition to large capital budgets and debt loads, MLPs were also burdened by incentive distribution rights or IDRs (i.e. payments made to general partners as distributions to limited partners increased). As oil prices weakened from 2H14 to 1H16, MLPs struggled to raise equity. With many MLPs overextended and capital markets challenged, once-sacred distributions were cut, particularly by smaller MLPs. It was a painful period for MLP investors – many of whom exited the space.

MLPs learned valuable lessons from past challenges. Today, MLPs have already used excess cash to reduce debt and lower leverage. Most MLPs are targeting leverage at or below 4x, even as low as 3x (read more). Today’s stronger balance sheets can also add confidence to MLP payouts. IDRs have largely been eliminated. Only two names representing less than 15% of AMZI by weighting still have IDRs.

Reestablished track record of distribution growth complemented by buybacks

With balance sheets already improved, MLPs have used excess cash flow for distribution growth and opportunistic buybacks. Over 90% of AMZI by weighting has grown its distribution within the last year, and there has not been a cut to a regular distribution for an AMZI constituent since July 2021 (read more). Instead of focusing on growth at all costs, MLPs have prioritized sustainable distribution growth. Investors can have greater confidence in payouts today. As of December 13, AMZI was yielding 7.0%, which is particularly attractive as interest rates fall (read more).

While distribution growth has been the priority, MLPs have also been active with buybacks in recent years, albeit repurchases tend to vary (read more). Over 70% of AMZI by weighting has a buyback authorization in place as of December 10. Buybacks are a particularly strong example of how the space has changed given frequent equity issuances prior to 2015.

Despite improvements, MLP valuations still discounted

By all accounts, master limited partnerships are arguably in a much better position today than they were a decade ago. MLPs are generating free cash flow, growing distributions, and opportunistically repurchasing equity. Companies have simplified their structures, and balance sheets are stronger. The investment case is arguably as strong as it’s ever been.

Despite these drastic improvements, MLP valuations remain subdued. As of December 10, AMZI was trading at a weighted average EV/EBITDA multiple of 9.1x based on 2025 estimates or just 8.7x using 2026 consensus estimates from Bloomberg. The three-year average forward EV/EBITDA multiple is 8.8x, and the ten-year average is 9.9x. Even with strong performance in recent years, MLPs have not become expensive, and multiple expansion has not really materialized. This could be attributed to the niche nature of MLPs, their exclusion from broad market indexes, or perceived hindrances to directly owning MLPs, namely the Schedule K-1 issued for taxes. To be clear, investors can access MLPs through exchange-traded products, mutual funds, and other vehicles to receive a Form 1099 (read more).

Bottom line:
Investors revisiting MLPs should be aware of the broad improvements made by companies in recent years. MLPs represent a compelling investment opportunity given free cash flow generation and attractive yields, which are enhanced by ongoing distribution growth. Even with these improvements and strong performance, MLPs have not become expensive relative to history.

This article was originally published December 17th, 2024 on ETF Trends.

A new poll recently published by health policy research firm KFF revealed that roughly 12% of U.S. adults (or one in eight) have taken GLP-1 drugs, a category that includes Wegovy, Ozempic, Zepbound, and Mounjaro. Of those surveyed, 6% are currently taking a drug from that group.

Although many survey participants rely on these medications for other conditions like Type 2 diabetes, 38% are taking them for weight loss. This level of adoption is despite the high cost of these drugs, which runs $1,000 a month before insurance coverage. Patients, health providers, and insurance companies increasingly realize that the benefits far outweigh the costs.

Battling obesity

Obesity is a global problem affecting more than 1 billion people. The number of adults living with obesity worldwide is more than twice what it was in 1990, with 43% of adults now overweight, the World Health Organization notes. Furthermore, according to Morgan Stanley, there is a macroeconomic toll in addition to the mental and physical consequences for the population. The firm posits that the cost of adverse health outcomes and reduction in productivity whittles 3.6% off the gross domestic product of the U.S.

GLP-1 (glucagon-like peptide 1) drugs have been proven effective in promoting weight loss. GLP-1 is a hormone the body produces that is released when a person ingests food. It triggers cells in the pancreas that, in turn, produce insulin, which regulates blood sugar. GLP-1 drugs have been approved since 2005 as a treatment for type-2 diabetes. But new formulations of the drugs for obesity can now promote reductions in body weight by 10-20%.

A breakthrough disruption

For patients considering surgical options, GLP-1 drugs are being hailed as a “miracle drug.” They are said to represent a major advancement in public health. This breakthrough status also carries with it the potential to disrupt other companies in health care. It has broad implications for many industries, from medical device makers to the food and beverage industry to airlines. A study looking at United Airlines finds that the company could save 27.6 million gallons of fuel per year, for $80 million, if the average passenger were 10 pounds lighter.

These drugs are not without side effects. However, data from the largest clinical trial of GLP-1’s to date, the SELECT trial of approximately 18,000 non-diabetic participants, is compelling. The study published in November 2023 showed evidence of reduced incidences of heart attacks, strokes, and deaths from cardiovascular disease. Additionally, 73% of patients did not progress to diabetes. Subjects also saw a 19% reduction in all causes of morbidity. For patients, these are no doubt life-changing results.

GLP-1 drugs are a disruptive economic force, with Goldman Sachs estimating the market for GLP-1 drugs will grow to $100 billion by 2030. These new anti-obesity drugs could see a patient population as high as 70 million, resulting in an increase in U.S. GDP levels by as much as 1% in the coming years.

Our index approach

VettaFi is excited to launch the first Index, the VettaFi Weight Loss Drug & Treatment Index (THINR), to provide diversified exposure to this disruptive investment theme.

Eli Lilly and NovoNordisk, the Index’s two largest holdings, currently dominate in terms of market share. That said, new market entrants and methods (like pills) are on the way, advocating for a more diversified approach.

The Index comprises 70% of drug developers/manufacturers and 30% of enablers.

  • Drug developers/manufacturers are pharmaceutical and/or biotech companies with either a branded GLP-1 agonist product or a product in the GLP-1 drug development pipeline in FDA clinical trials.
  • Enablers are companies involved with the outsourced development and manufacturing of GLP-1 agonist drugs. These are also known as contract development and manufacturing organizations (CDMOs). These companies conduct measurement and analysis of GLP-1 agonist drugs. This also refers to companies involved in the distribution or administration of GLP-1 agonist drugs. That would include the coordination of prescriptions and drug-delivery mechanisms such as injection pens.

To qualify for inclusion in the Index, companies must be members of the VettaFi S-Network Developed World Equity 5000 Index or the VettaFi Developed World Index and meet a minimum market capitalization requirement of USD 500 million. Constituents are float-adjusted market cap weighted within their segment allocation as outlined in the Index Methodology.

Given the fast-changing nature of the space, the Index is rebalanced on a quarterly basis. More information on our Index and backtested results can be found on VettaFi’s website here. and our white paper here.

Since its live index inception on 1/25/24, the Index is up 18% YTD on a total return basis (as of 5/20/24).

An ETF tracking this index has been issued by Amplify ETFs.

 This article was originally published May 21st, 2024 on ETF Trends.

VettaFi hosted a webcast, Bring your brand to life with event activations, on December 3rd, 2024. VettaFi CMO Jon Fee moderated the discussion along with Cassie Hughes, Co-Founder and Chief Strategy Officer of Grow Marketing, and Kate Gunning, Founder and CEO of Crush Brand Advisory.

As the world becomes increasingly digital, many marketers have forgotten the power of live, in-person events. “As much as I continue to lean more and more digital, you can’t replace the power of looking someone in the eye in real life, shaking their hand, and learning about them,” Jon Fee said.

Experiential events

Fee opened the discussion by surveying attendees about whether they were using experiential marketing in their media mix. Over 40% of respondents claimed to not know enough about experiential marketing. 

Hughes noted that there is a difference between event activations and experiential marketing, though there is some overlap. “From our perspective, experiential marketing is anytime you are bringing people together in real life talking about a product or a service,” she clarified.

Events and sponsorships

56% of attendees claimed that events and sponsorships were somewhat important, but that they rely on other tactics more heavily, with 28% claiming events and sponsorships were very important.

Experiences fill you up with an emotive reaction to something; making people feel can also move them to take action.

Though real-life events do not technically reach as many people as digital engagements, they do move audiences farther and faster. “Deeper connections hold longer in the memory,” Hughes continued.

Gunning added, “Think about your own life and your world and how you feel when you have a combination of DMs and texts from a friend vs. a coffee date or a dinner.”

The digital and real-life combo

Gunning shared that, working for a large firm, she A/B tested doing just events and both events and digital marketing for a certain set of clients. The combination of both is invaluable; digital events complemented with in-person events are more powerful than doing either alone. 

Hughes shared some intriguing stats - 79% of US marketers generate sales using experiential marketing, and more than one in three CMOs set aside anywhere from 21% to 50% of their budgets for brand experiences. Additionally, 67% of B2B marketers think of event marketing as their most effective strategy.

Bringing the brand to life

Figuring out how to do live events and experiential marketing can be a challenge. “The key is the triangulation of partnership between marketing, sales, and the leadership team,” Gunning said. She also outlined the importance of planning for what happens after the event. Events can work on their own terms, but also create opportunities for follow up conversations and content.

Giving an example, Hughes quoted Peter McGuiness, CMO, Chobani, by pointing out, “everything is an event, but everything done well is an experience.” She shared how AirBnB and Barbie partnered for an experiential marketing campaign that was heavily promoted digitally and went viral, but focused on a real space and experience to break through the noise.

Debunking myths

Fee noted that a lot of hesitancy around event sponsorships comes from three myths:

  • Breaking through the noise is easy.
  • Only top-tier sponsors get recognition.
  • Events have weak ROI and are hard to track.

Gunning volunteered that tracking ROI involves having clear goals and a clear plan. For example, having people scan codes at a booth and knowing exactly what you are doing to facilitate that action can make ROI metrics easier to decipher. “What are the opportunities for connection with the audience you are going after?”

Hughes underscored most of the brands that fail to see the ROI of an event sponsorship don’t have clear goals. “Clear goals have ROI and there are ways to track it.” Departments working together is also essential. If marketing is delivering an event, sales needs to participate in it and not feel like it is silo’d off to just marketing but, instead, a shared opportunity.

“As you think about event ROI,” Fee said, “What I think folks often forget is just because the field of opportunity is right in front of you, that doesn't mean you show up without a plough. You still have work to do… It requires everyone to roll up their sleeves and get to work.”

Top sponsors don’t have a monopoly - good ideas shine through

One assumption many small or medium sized firms make is that it is hard to stick out against the big dogs. Hughes countered that the brands that stick out are the ones that do clever, inventive activations. In fact, top brands often only lean on their own name recognition to do the heavy lifting, which creates opportunities for other brands to execute clever activations. 

Smart activations create a value exchange. Breaking through the noise is a matter of being thoughtful about how you present your technology, your brand, or your service. Gunning added, “The way you break through the noise is by being relevant.” Hughes then shared an example from Google. Google had a rough go of introducing the Google Home products, but investing in a clever activation, helped connect the product’s use case and improve its position in the marketplace.

Fee noted, “Even Google has a hard time breaking through with new products.” In a similar way, big asset managers who haven’t touched the ETF space might have trouble breaking in despite their brand name.

Conference preparation

Preparation is critical to make a live event successful. “There’s a pre-, there’s a during, and there’s a post,” Hughes said, so she discussed the value of having an outline and plan for all. Using the Komen Walk from Exchange as an example, she noted finding natural activities at a conference where you can make connections is important. In addition, walking the expo hall can not only introduce you to new folks, but it can also inspire your future activations.

Gunning spoke to the value of structured time and open time. “I try to get deliberate about the 3-5 people I really want to meet,” she said. Then she uses the open time to map out where she wants to be stimulated or pursue learnings. “I love to use these settings to learn, observe, and see if I can pick up on patterns.”

The case for event sponsorships is strong

Firms of all sizes stand to benefit from event sponsorships and activations. Large firms can use the opportunity to appear more human and approachable. Medium-sized firms benefit from appearing next to industry leaders and have the opportunity to stand out with a smart activation, and smaller firms can leverage events to fuel growth. Regardless of firm size, you can rely on event sponsorships to reliably generate content and drive business goals.

Interested in learning more? Watch the full discussion here. 

Bring your brand to life with event activations at Exchange, learn more here.

What are ADRs?

American depositary receipts (ADRs) are financial instruments that allow U.S. investors to buy and sell foreign companies on U.S. stock exchanges. A U.S. bank issues a certificate representing a specific number of shares of the foreign company.  

ADRs allow U.S. investors to gain easy, liquid access to foreign companies without worrying about opening custody accounts, foreign currency conversion, and trading on foreign exchanges. ADRs are priced and pay dividends in U.S. dollars and adhere to U.S. financial reporting standards. The advantage for foreign companies is that by offering ADR versions of their shares, they can provide a convenient vehicle for U.S.-based investors to invest in their company.    

Pros & cons of owning ADRs

Pros

  • Easy to trade and track
  • Available through U.S. brokers and trading firms
  • U.S.-dollar-denominated
  • Provides international diversification without direct currency risk

Cons

  • Potential for double taxation (local and abroad)
  • Limited universe of names available
  • Subject to currency conversion fees

Direct indexing

Direct indexing is one of the fastest-growing segments of the financial services industry, with Cerulli Associates projecting separately managed account (SMA) assets of $2 trillion by the end of this year. 

Direct indexing allows advisors to customize or manage taxation in index portfolios. For example, if a client works for a company and has highly appreciated exposure to its stock, that company can be excluded from the direct index. Direct indexing also accommodates personalization, such as the expression of ESG and value-based screening. Additionally, direct indexing can be used to harvest tax losses and generate “tax alpha.”   

Direct indexing & ADRs

One of the challenges for direct indexing is how to best provide exposure to non-U.S. companies. ADRs are the perfect tool for this, but to date, only a handful of index providers offer ADR index exposure. Arising from this unmet need, VettaFi has created and launched a new suite of ADR Indexes.

VettaFi’s new ADR index family

VettaFi’s suite of ADR Indexes provides a broad range of international coverage using ADR-listed holdings, including developed and emerging markets, as well as full world exposures.

While there are far fewer ADRs than local exchange-traded foreign equities, each index has been constructed to minimize sector, country, and tracking error differences relative to the international equity index upon which it is based.  

These indexes will provide a valuable tool for accessing foreign markets in SMA and direct indexing portfolios.  

If you would like to learn more about VettaFi’s new ADR Index family, please contact the team here. 

One of the biggest challenges facing modern issuers is getting their products to stand out. As investing has become more accessible to the average person, the number of products available has increased to meet demand. But as investing continues to innovate and evolve, the amount of products available to investors has grown. In turn, this has created intense competition and obstacles for new products. 

As products evolve, so can problems

Understanding how we got to the current state of affairs is useful for unpacking how to solve the biggest challenges facing issuers.

Investing has come a long way from its early roots in trading commodities and debt. The creation of the precursor to the S&P 500 in 1923 marked a significant turning point. This index allowed investors to track broad market performance rather than individual stocks, fundamentally changing investment strategies.

Mutual funds emerged as another disruptive force. Starting in an early form in 1924, mutual funds combined risk mitigation through pooled resources with broad market tracking. Institutions and eventually retail investors gained access to diversified, liquid products.

The next big innovative jump came with Exchange-Traded Funds (ETFs). These transparent, flexible investment vehicles democratized the market further. If mutual funds were the Boston Tea Party, ETFs were the Battle of Saratoga. By 2020, over 3,000 ETFs were trading in the U.S. market, allowing investors to access previously inaccessible regions, sectors, and factors.

The crowded marketplace

While innovations widened market access, they also made it easier to create investment products. The SEC ETF Rule in 2019 streamlined the process, allowing more companies to launch ETFs. Over two decades ago, there were four issuers with 80 different ETF products. Today, there are over 200 issuers with more than 3,000 ETFs. Despite this proliferation, investors often stick to established names, with 75% of global AUM in mutual funds and ETFs being in products at least ten years old.

Standing out in a competitive landscape

With legacy products getting a huge part of the pie, issuers have resorted to lowering fees on newer products, which means that they need to cut costs in other areas. To thrive in the next decade, asset managers must rethink their innovation strategies, embracing new product categories and value-added services, all while competing with a host of existing and new products from other issuers. As daunting as this task can appear to be, there are ways to increase efficiency and grow AUM. Finding the right index can give a product a solid foundation.

VettaFi’s index services 

VettaFi offers a suite of solutions designed to empower asset managers to stand out:

Bring your product ideas to life and minimize risk

Whether you are starting from scratch or optimizing an existing index, VettaFi can turn your new product ideas into reality. Issuers can create their own customized investment products by utilizing VettaFi’s Index Factory, which allows the use of client-proprietary data, as well as 3rd party data to build any desired index. Customization ensures that indexes align precisely with specific investment goals and market views, reducing risk.

Flexible services tailored to you

VettaFi’s services cover daily calculations, corporate action handling, implementation of weighting rules, and fully outsourced administration. Efficient and accurate index management allows asset managers to focus on core investment strategies, freeing up resources for other services.

Reduce costs and attract investors

Investors interested in a specific theme or a disruptive sliver of the market, such as A.I., renewable energy, weight-loss drugs, or robotics, can capitalize on those ideas’ high growth potential. By leveraging VettaFi’s index licensing services, asset managers can reduce operating costs by replicating index performance in their investment products. This cost-efficiency enables managers to offer more affordable products and attract a broader investor base.

The takeaway

Asset managers who create cost-effective or hyper-customized products will thrive as investment opportunities multiply. VettaFi’s index services equip managers to navigate this evolving landscape, stand out, and meet the diverse needs of modern investors.

Interested in learning how to partner with us? Click here.  

Quality is a sought-after, fundamental investment factor whose origins in investment theory date back to the 1930s. Traditionally, quality companies are consistent in their earnings, profitable, and solvent. Firms that have these traits fall under the quality factor umbrella.

However, finding the right quality screens is important, as recent market events have impacted many firms that have fallen under the traditional umbrella of quality.

Quality reimagined in the wake of COVID-19

The COVID-19 pandemic created a surge in the total debt of nonfinancial businesses. After a decade of debt growth averaging roughly 5.5%, debt jumped 9.1% in 2020. On the heels of COVID-19, increased inflation led to higher interest rates. 

This means more firms have more debt that will be harder to refinance. Even firms that traditionally succeeded at being considered examples of quality investing are now contending with higher debt and less ability to navigate that debt successfully. Companies that would otherwise introduce stock buybacks or pay out dividends must instead direct more earnings toward clearing outstanding debt. 

Getting the right quality screen

Screening for quality has arguably never been more important. Solvency is critical. In 2022, almost half of all publicly listed firms were unprofitable despite fewer firms declaring bankruptcy.

VettaFi’s Quality Indexes measure the performance of U.S. companies, focusing on the highest quality scores. Profitability and solvency are targeted, and sector restraints and market cap weight are considered. (A full breakdown of the methodology is covered here.)

The VettaFi US Large/Mid-Cap Quality Index outperformed the benchmark VettaFi 1000 Index, which comprises the largest 1,000 publicly traded stocks in the U.S. market. 

Learning more about VettaFi’s approach to quality

Interested in learning more about how the VettaFi US Large/Mid-Cap Quality Index is constructed? Our recent white paper explores our approach to the new quality factor. Download the paper here.

Want to use the VettaFi US Large/Mid-Cap Quality Index or leverage our index factory to create your product? Speak to our index specialists today.

VettaFi announces that its fast-growing index business has successfully completed its first independent audit of its statement of adherence with the IOSCO principles for financial benchmarks

Focus on index processes, governance, controls, and operations is core to VettaFi’s highly differentiated approach

VettaFi, a global leader in indexing, data & analytics, and digital marketing for asset managers, is today announcing that after a thorough assurance engagement by an independent accounting and professional services firm, VettaFi’s index business has completed its first audit of its adherence with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks. A limited assurance opinion was issued as of June 30, 2023, by PricewaterhouseCoopers LLP.

The IOSCO principles have been the industry standard for more than a decade and cover best practices in governance, accountability, quality and transparency of benchmark design, and more.

“My colleagues and I could not be more pleased with the results of this review,” said Brian Coco, Head of Index Products for VettaFi. 

We are building a world-class indexing business, so it only makes sense that we would want to ensure we are adhering to the global standard for financial benchmarks.
Brian Coco
Head of Index Products 

The full Statement of Adherence and detailed results of the audit, as well as the scope of the indexes included within audit, can be requested from VettaFi.

This announcement caps what has been a busy six-month period for VettaFi indexing. In April, the firm announced the acquisition of the ROBO Global suite of indexes, a leader in powering research-driven disruptive technology portfolios. Just last month, the firm also announced the acquisition of EQM Indexes, an innovative provider of custom and thematic indexing solutions.

These acquisitions, coupled with numerous new client partnerships and organic growth among VettaFi’s existing clients, have pushed the total amount of assets tracking VettaFi benchmarks to nearly $19 billion. More recently, VettaFi launched its new Global Developed Benchmark Series as part of its 2023 index innovation roadmap.

“When we set out to create what is now VettaFi, my colleagues and I knew that solving the industry’s biggest indexing challenges was going to be core to our mission,” said Leland Clemons, CEO of VettaFi.” We have since added new capabilities and brought on some of the most respected talent in the business to deliver this foundation and further align our capabilities to support our clients’ growth ambitions.

“Today’s announcement highlights that even as we’ve been driving growth with our clients and partners, we have never lost sight of doing things the right way. I’m thrilled for our Indexing team and their steadfast adherence to IOSCO, and equally as excited to continue to tell the VettaFi indexing story to the marketplace,” he added.

In the rapidly expanding ETF community, it can be hard to stand out. So it is with pride and gratitude that TMX VettaFi shares that it received three ETF Express awards last week.

TMX VettaFi is now a three-time winner of the "Best Research" award. It also received the "Best US Index Overall Provider" and the "Best Index Provider - Equity ETFs" awards. The ETF Express awards are chosen in part based on voting by the ETF industry. 

Brian Coco, TMX VettaFi's head of index product, and I joined leaders from across the ETF ecosystem at the awards celebration in New York. It was exciting to see many of our partners in attendance receiving their own accolades.

VettaFi's indexing capabilities

"Winning awards as the Best Index Provider is so special. It shows we continue to earn the trust of our clients," explained Coco. "It is a testament of our ongoing commitment to provide clients a great experience."

VettaFi is the index provider behind some well-known ETFs. Those include the Alerian MLP ETF (AMLP), the American Century US Quality Growth ETF (QGRO),  the Amplify Online Retail ETF (IBUY), the ROBO Global Robotics & Automation Index ETF (ROBO), and the VictoryShares Free Cash Flow ETF (VFLO).

"We continually strive to not just be an index provider, but a partner that can collaborate on innovative new products. TMX VettaFi is using unique datasets and insights that are the result of years of our collective experience in the ETF industry," Coco added. Recent indexes include a global suite of companies that have initiated a dividend in the last three years.

Providing high-quality index research

VettaFi provides index research support for some of the more popular ETFs tied to VettaFi. For example, Stacey Morris and Phil Segal are focused on energy infrastructure, while Zeno Mercer and Rafael Silva write and speak with clients about disruptive technology industries..

"We publish timely and insightful research on energy and energy infrastructure for advisors," noted Morris. "However, we are also able to leverage our expertise in creating one-of-a-kind indexes for issuers."

Coverage for nearly 4,000 other ETF children

The TMX VettaFi research team, which I lead, also publishes daily commentary focused on many other U.S. listed ETFs. We consider these funds part of our ETF family too. 

The expert insights content found on this platform usually dives into an investment theme and showcases a few related ETFs that provide exposure. Such efforts help us as we are recurring guests on the ETF Prime podcast and appear in print and on financial TV programs on a consistent basis.  

"Our research team comes from a wide range of professional backgrounds. This brings several unique perspectives to an always changing industry," noted Roxanna Islam. Islam is head of sector and industry research at TMX VettaFi. 

I love working with people who think differently from me and can challenge my ideas in a constructive way.

Educational content is published on a range of topics including commodities, cryptocurrency, equity, fixed income, and options-based ETFs. Our team also hosts regular virtual events with asset management partners and hundreds of advisors. Indeed last week, approximately 400 live attendees joined us for a three-hour Fixed Income Symposium

"The VettaFi research team is dedicated to delivering timely, topical analysis on valuable trends in the marketplace," added Kirsten Chang, senior industry analyst at TMX VettaFi. "However, we want to do so in an actionable way that makes it clear our advisor audience is always top of mind." 

If you are an asset manager interested in partnering with VettaFi and tapping into our award winning index and research expertise, schedule time with our team here.

VettaFi LLC ("VettaFi") is the index provider for AMLP, QGRO, IBUY, ROBO, and VFLO, for which it receives an index licensing fee. However, AMLP, QGRO, IBUY, ROBO, and VFLO are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP, QGRO, IBUY, ROBO, or VFLO.

This article was originally published October 28th, 2024 on ETF Trends.

It’s exciting when the financial services community comes together to learn from one another. VettaFi hosts several virtual events on a weekly basis with leading asset management companies and practitioners. As one of VettaFi’s Voices, I help moderate these discussions — and I learn a lot, too.

Later today, I will be speaking at the NYSE Annual ETF Industry Summit about how to create meaningful engagement in the digital age of content. I’m honored to be a part of this event and always love being at the historic New York Stock Exchange to celebrate the industry.

It’s been four years since the pandemic began. Given that, you might think fellow advisors no longer want to attend remote webinars. However, VettaFi data suggests otherwise.

Advisors still love webinars

Just under 400 people attended the three-hour Q4 Fixed Income Symposium we hosted in October, and more than 200 people are tuning in to hear from us and industry experts during our one-hour events. Upcoming topics include a focus on actively managed equity, mid-stream energy, options-based strategies, and preparing for portfolios for yearend. Register to join us – for added value, during a VettaFi webinar, advisors can also obtain continuing education credits. 

During our virtual events, we ask advisors many questions to help us understand investor’s sentiment toward the topic. In October, we also asked “What is the most effective way for asset managers to keep you informed?” The top two answers were emails (72%) and webinars (69%). 

These ranked significantly higher than whitepapers (39%), websites (33%), videos (23%), social media (5.7%), and wholesaler calls/visits (4.6%). Respondents were able to select all that applied. 

VettaFi voices bring outside perspective

At the NYSE Summit we will likely also discuss how some firms look to collaborate with financial influencers. I am clearly biased, but partnering with a strong third-party firm (particularly one with award-winning ETF analytical expertise) is a great alternative to someone with lots of Instagram followers but limited relevant expertise. 

In contrast, my colleagues Cinthia Murphy, Kirsten Chang, Roxanna Islam, and I are routinely quoted on TV and in the financial press. Due to our daily commentary on ETF industry developments, we bring credible outside views that help in the education process.

I know the next two months of 2024 will be busy but I’m excited to be a part of a community that learns from one another.

 

This article was originally published November 4th, 2024 on ETF Trends.

Data is critical to a financial product's success.

Understanding who is in your ecosystem and how they feel about your products will help you cater messaging and build efficiency. That said, there are limitations to the utility of first party data, which is why third party data is essential.

Here are four reasons you need third party data to bolster your first party data set.

1. Understand your potential customers

First party data can give you a robust view of everyone in your ecosystem. But it does not tell you much about potential customers outside of it. Knowing who your investors are is useful, but to grow you need to break out beyond your current customer base. Third party data will give you access to additional profiles and information about potential investors. Combining this information with the first party profiles you have can help you figure out where to next target your marketing efforts.

2. Fill in the blanks within your own ecosystem

Your first party data can only provide a very specific portrait of your existing customer base. Understanding what advisors and investors are researching outside of your ecosystem can help you develop products and refine your messaging. You might also gain insights into where and how investors are getting to your products and discover opportunities to accelerate growth. You can begin to build out a 360 view of your target investor audience.

3. Build more personalized campaigns

If you want to build AUM, then you need to meet your clients where they are online. Third party data is essential if you want to make truly personalized journeys for your prospects. Having messages that can be specifically tailored is more effective than general marketing. Research has shown that personalized campaigns boost click through rates, increase conversions, and help with sales.

4. Gain a competitive edge

If you have a product in the market, you likely have competition from similar products targeting the same potential investors. Leveraging third-party data can reveal critical insights into who is investing in your competitors' products. By understanding their investor base and behavior, you can uncover actionable opportunities to refine your strategy, differentiate your product, and maintain a competitive edge in the marketplace.

If you're interested in working with a 3rd party data provider, learn more about our investor intelligence data here. 

Being prepared always pays, particularly in the world of indexing.

Though you can't prepare for every eventuality, you can set yourself up for flexibility. It is also important to constantly take stock of where you are and what you can be doing better. Are you using the right benchmarks? Are you paying a premium? Are you being as efficient as you can be?  

At VettaFi, we pride ourselves in our ability to partner with issuers and handle their index needs so their products have the opportunity to grow, no matter the circumstances. 

The SEC has implemented a definition change in form N-1A.

Effective immediately in July 2024, open-ended funds must compare performance to an "appropriate broad-based securities market index." While new rule changes can be bureaucratic hassles, they can also provide an opportunity to explore new index possibilities and reimagine how you could cut costs, increase efficiency, and improve your product capabilities. 

VettaFi has a U.S. and global benchmark index series that can provide issuers with a cost-effective way to benchmark their funds across U.S., developed, and emerging markets. 

Our core benchmark series was built to specifically serve as viable benchmarks that are interchangeable with widely adopted broad-based benchmarks, providing global coverage of equity markets across size and segments.  

Some examples of the indexes that could be used as appropriate benchmarks to fulfill the new SEC rule include: 

We welcome issuers to have a conversation with us and learn about how we can help you take advantage of our benchmark series. 

We also have other indexing services that can help you cut costs, including index calculation and administration. And if you are looking to build an index from scratch using one of our base universes, we can help you do that too! 

Let's talk >

VettaFi is the only issuer services provider that supports the entire product life cycle.

We are dedicated to helping you accomplish your goals from index licensing and calculation to customization.

  Other index providers VettaFi
Partnership Most index providers only provide licensing services with limited longer-term support throughout the product life cycle. We offer hands-on, end-to-end product services from index development and maintenance, to post-launch support including data-driven insights, digital marketing tactics, and conference exposure.
Costs Using different firms for your index needs typically results in higher costs and longer onboarding times. Partnering with one firm can save on costs and build efficiencies of scale.
Value-alignment Off-the-shelf index methodologies may conflict with your goals, investment strategy, or firm values. We can customize to exclude industries, sub-industries, or individual stocks to align the index with your values and vision.
Scalability Boutique firms may struggle to handle increasing data volumes and processing requirements efficiently. Our cloud-based index technology has proven scale and has grown to over 350 indexes and over 200 customers globally, with more to come.
Flexibility Many large index providers do not allow customization, as their index construction process is restricted to using their proprietary datasets. The VettaFi Index Factory allows the use of client-proprietary data, as well as third-party data to build any desired index.
Speed of backtest Some index providers can only deliver one backtest over a period of weeks. Depending on need, we can produce over twenty-five backtests in less than a month, collaborating with the client every step of the way.
Transparency Is your index provider keeping up with the latest ever-changing compliance requirements? We are built to handle compliance and align with the IOSCO Principles for Financial Benchmarks to avoid conflict of interest.

 

Speak to our team of index experts to unlock your product potential >

Explosive growth in developing nations

Investors look abroad because the growth potential of developing nations can be explosive. But demographic trends are another important factor in evaluating growth opportunities. Countries like China, have a declining workforce due in part to the one-child law.  While India, on the other hand, has a younger growing skilled workforce. 

Overweighting the regions most primed for growth could create a unique investment opportunity. Investors looking for both strong growth and dividends could find what they seek in VettaFi's new family of demographic dividend growth indexes. These indexes tilt towards countries and regions that have younger, rapidly growing populations going into the workforce.  

The VettaFi Developed Ex United States Demographic Dividend Growth Index (DXUDDG) modifies the VettaFi Developed World ex United States Index (VFDXUS) that focuses on developed countries ex-United States by applying a working age population growth factor to its constituent weight. The VettaFi Emerging Markets Demographic Dividend Growth Index (EMDDG) does the same to the VettaFi Emerging Markets Index (VFEM). 

Growing workforce populations

Growing workforce populations are a fundamental tailwind not often quantified in other models, creating a unique opportunity for issuers to enhance international exposure in areas poised for growth. 

Nations experiencing a decline in their workforce and an aging population are less likely to see economic growth. As older professionals retire, with fewer younger professionals coming up to take their place, underlying economies can easily stagnate or shrink, undercutting their growth potential. In contrast, a younger population with multiple early career professionals ready to take the place of the retiring generation tends to grow as the next generation of laborers takes over. A robust workforce with purchasing power is an enormous catalyst for growth.  

Leveraging the opportunities

Leveraging the opportunities available in countries with favorable demographics and burgeoning young workforces, these indexes can help provide exposure areas of explosive growth potential. To access exposures like the VettaFi Developed Ex United States Demographic Dividend Growth Index or the VettaFi Emerging Markets Demographic Dividend Growth Index, or customize a product based on your individual product needs, partner with VettaFi's index experts.  

Learn more about VettaFi Indexing > 

Indexes are an important foundation, enabling investment products to capitalize on timely market opportunities and compelling investment ideas. The right index can provide a blueprint to success by capturing elements like underutilized growth potential, decreasing operating costs, or increasing efficiency.

Issuers looking to achieve positive results should consider the following:

  • Differentiated investment ideas
  • Low-cost options
  • Fresh takes on a mainstream benchmark concept

Here are three index ideas that follow this formula.

Differentiated investment idea: Tapping into both sides of the energy transition equation

Solving the global energy trilemma - the need for secure, affordable, and low-carbon energy solutions - will require the use of both fossil fuels and clean energy sources for many years to come.

The energy crisis is a long-term problem, and investments in oil and gas will continue even as cleaner energy alternatives start to come online, creating a growth opportunity for investors to capture. For investors contemplating the best way to gain exposure to the companies actively addressing this problem, a combination of alternative and traditional energy companies may be the most practical approach.

However, investment products rarely commingle fossil fuel and new energy companies, even though both are at the center of efforts to de-carbonize our energy sources. Many energy indexes rely exclusively on one or another, but the VettaFi 2050 Energy Transition Index (VNRGT) combines both, offering more diversified and time-based exposure.

Combining clean energy and fossil fuel companies with a dynamic weighting scheme, the VettaFi 2050 Energy Transition Index (VNRGT) reflects the current global energy mix and how it will likely evolve. It includes the companies addressing the world's need for secure, affordable, and low-carbon energy for years to come.

Want to dive deeper into this investment idea? Check out our recent article.

Low-cost option: Benchmark series

Benchmarks are an essential part of a product - whether passive or active. The SEC recently implemented a definition change in form N-1A effective July 2024, that open-ended funds must compare performance to an "appropriate broad-based securities market index."

VettaFi offers the U.S. and global benchmark index series that can provide issuers a cost-effective way to benchmark their funds across U.S., developed, and emerging markets.

This core benchmark series serves as a source of viable benchmarks that can serve as a lower-cost alternative to widely adopted broad-based benchmarks, providing global coverage of equity markets across sizes and segments.

While new rule changes can be bureaucratic hassles, they can also provide an opportunity to explore new index possibilities and re-imagine how you could cut costs, increase efficiency, and improve your product capabilities.

Looking for a more efficient benchmark? We have options - talk to the team.

A fresh take on a classic concept: Demographic Tilts

One way to provide a differentiated product in the market is to take a core offering and apply a fresh, interesting growth-potential tilt.

In addition to diversification, investors often look abroad for more favorable valuations and growth potential accompanied by favorable macro regime shifts. International market allocations are typically sourced by traditional, market-cap-weighted indexes. Demographic trends offer a new lens to view evolving growth opportunities.

Overweighting the countries best positioned for long-term growth based on demographic trends offers a compelling and unique investment approach. Investors looking for a differentiated, growth-oriented approach to investing abroad should consider VettaFi's new family of demographic growth indexes. These indexes tilt towards countries and regions that have younger, rapidly growing working-age populations driving economic consumption and GDP expansion while tilting away from countries whose expected working-age population demographics are less favorable to sustain long-term growth.

The VettaFi Developed Ex United States Demographic Dividend Growth Index (DXUDDG) modifies the VettaFi Developed World ex United States Index (VFDXUS) that focuses on developed countries ex-United States by applying a working age population growth factor to its constituent weight. The VettaFi Emerging Markets Demographic Dividend Growth Index (EMDDG) does the same to the VettaFi Emerging Markets Index (VFEM).

Leveraging the opportunities available in countries with more favorable demographics and burgeoning young workforce, these indexes provide a core allocation with a tilt towards countries/regions poised for growth based on economic trends.

Interested in learning more? Read our latest article about demographic tilts.

These indexes are available for licensing. Be the first to bring these unique investment ideas to market - or consider decreasing your operating costs by switching to a lower-cost benchmark.

We're here to assist with all of your product development needs - book time with our team.

Up-and-coming dividend players unlock growth and income

Growth has been a factor that has earned attention in 2024 due to the success of high-profile megacap companies like the Magnificent 7 stocks in the first half of the year. One often overlooked indication of company strength is the ability to issue and sustain a dividend. Dividends are a signal of financial health and stability. Historically, dividends have been associated with value-oriented companies. However as growth companies mature and generate excess cash flows, these funds can be returned to shareholders through dividend payments. 

Does the initiation of a dividend portend the end of a company's growth cycle?  Not necessarily.  Chip maker Nvidia initiated its first dividend in November of 2012.  Over that period Nvidia has seen company growth soar and its share value rise by more than 41,000%.   

Recognizing this potential, VettaFi has launched a unique suite of indexes that focus on companies that have initiated or reinitialized dividend payments after at least three years without dividends. The VettaFi Dividend Initiators Index Suite offers a comprehensive approach to capturing both the potential dividend growth and the cash-flow stability associated with these companies, covering a range of market capitalization and geographic regions. 

 The Advantage of Early Identification

One of the most compelling aspects of the VettaFi Dividend Initiators Index Suite is its focus on companies starting their dividend-paying journey. These companies are typically not yet included in the most well-known dividend growth indexes tracked by ETFs. By the time a company meets the decade-plus stringent criteria to join these established indexes, much of the initial growth potential may have already been realized. The VettaFi indexes, however, capture these companies at the start of their dividend journey, allowing investors to benefit from their early-stage dividend growth or turnaround success. 

Companies remain in the VettaFi index for three years, provided they continue to make regular dividend payments. This approach ensures that the index reflects companies committed to returning value to shareholders while offering exposure to those in the early stages of a sustainable dividend lifecycle.  

Capturing Payers Often Left Behind  

Many other dividend indexes require a dividend distribution history of 20 to 30 years. This leaves out many higher-performing, new dividend-paying stocks such as:

  • Micron Technology: up 69% in price; declared its dividend on August 2, 2021
  • Constellation Energy Group: up 340%; declared a dividend on February 8, 2022
  • Meta Platforms: up 28%; declared its first dividend on February 1, 2024
  • Alphabet: up 16%; instituted a dividend on April 25, 2024
  • FTAI Infrastructure:  up 207%; instituted a dividend on November 1, 2022
  • Commerzbank AG: up 38%: re-instituted a dividend on February 15, 2023
    Data as of June 30, 2024

Three Versions to Consider  

The VettaFi Dividend Initiators Index Suite is available in three versions:  

VettaFi US Large Cap Dividend Initiators Index  
Designed to track large-cap companies in the United States.  

VettaFi Developed ex US Dividend Initiators Index  
Designed for exposure beyond the United States, the VettaFi Developed ex US Dividend Initiators Index targets large and mid-cap companies in developed markets outside the U.S.  

VettaFi Small Cap Dividend Initiators Index  
Focused on U.S. small-cap companies, the VettaFi Small Cap Dividend Initiator Index offers exposure to companies often overlooked in traditional dividend strategies. 

Performance and Potential  

In 2024, the VettaFi US Large Cap Dividend Initiators Index demonstrated its effectiveness, posting a return of 17%, modestly outperforming the S&P 500. With a robust back-test history spanning over 20 years, the index has consistently delivered strong performance, underscoring the value of early-stage dividend initiators.  

VettaFi Head of Research Todd Rosenbluth stated, "There's a new wave of growth companies paying dividends seldom found in traditional dividend indexes. Dividend payments are a sign of financial strength." 

Despite this strong performance, there are currently no ETFs tracking the VettaFi Dividend Initiators Indexes, which presents a unique opportunity for investors. As more growth-oriented companies, like Alphabet, Meta Platforms, and Commerzbank AG begin paying dividends, the relevance of this index will only grow. Investors who recognize the potential of these dividend initiators may find themselves ahead of the curve in capturing the growth and stability these companies offer.

As the market evolves and more companies enter the dividend-paying arena, the importance of early identification through the VettaFi Dividend Initiators Index Suite is likely to become increasingly apparent.  

Would you like to learn more about this or other index opportunities? Speak to our team of indexing experts.

Mastering the product development lifecycle

On June 18th, VettaFi hosted a webcast called From Idea to Market: Mastering the Product Development Lifecycle. The webcast covered how asset managers can best set up a product for success and the panel included VettaFi's Global Head of Index Sales Pete Dietrich, Head of Index Products Brian Coco, and Senior Industry Analyst Kirsten Chang. 

Chang asked Coco about the evolution of indexing. Adapting and keeping up with the times is critical for folks making products. Coco shared that many indexes were designed for a world that existed decades ago. “We have a wealth of data at our fingertips today. It is important to design new benchmarks that fit the times we are in.”

On the rise of active management

Active management has been popular these days, but Coco offered that there will likely be a move toward passive again as mutual funds give way to ETFs. That said, he sees a lot of utility and possibilities in the active management space, pointing to JEPI as an example of active funds in the derivatives universe that have seen success. 

How to approach creating a new product 

Asked what clients should think about when creating their indexes, Coco said, “We try to advise our clients to think about what’s the gap that their product sells for?” Speaking to the nuts and bolts of building an index, Coco opined “It’s similar to building a house,” noting that it’s more than literal nuts and bolts that go into it, but you also need an architect and a planner to bring it all together. “We need to be flexible; We need to iterate quickly and often with clients” Creating a product that fits into an issuer's current lineup is important.

Fads and themes 

Identifying the difference between a fad and a theme can be the defining factor of a fund that fizzles and a fund that finds success. Some investment ideas come and go, but others have staying power. “Does today’s theme become tomorrow’s sector?” Dietrich asked, noting that themes like AI and Robotics, weight loss, and the green energy transition are all current themes that could become something even more.  

ESG has been a bit controversial in the U.S. but continues to evolve. “ESG 1.0 was an institutional product. It was solving the problem of: I want benchmark-like returns, but I want to exclude things that do harm to either the ‘E,’ the ‘S,’ or the ‘G,’” Coco said. “I think ESG 2.0 will look a lot more like thematics do today.” 

The challenges of new products 

One of the challenges in creating a new product is the crowded market. Even established institutions will see many of their best ideas fail to hit the $100 million AUM mark. Dietrich shared that a full-funnel approach can help increase the odds. This means building product awareness through ads and media mentions, cultivating interest and providing market context around the product to those researching, and then helping sales teams close the loop at the end of the funnel. Dietrich pointed to VettaFi’s lead generation product, Soloist, which shares high-intent advisor leads with issuers subscribed.  He also expressed how VettaFi is useful at the top of the funnel offering a suite of digital media tactics as well.   

“We at VettaFi have 1.4 million monthly visitors to our websites and about 100,000 financial advisors that attend our webcasts annually. The question people must ask themselves is, ‘Do you know how financial advisors want to be engaged?’ The answer is – digital content.” To reach their AUM goals more efficiently, issuers need to be present where advisors are researching and engaging with them in their preferred manner. 

A full funnel partner 

Asked if VettaFi was best leveraged for newer firms, Dietrich said both have found utility. Newer issuers have leveraged VettaFi’s digital media, behavioral data, and expertise to stand out and make a name for themselves amid the crowded marketplace, while top five issuers have found the VettaFi platform useful for growing beyond their base. “We can just move faster than a lot of other shops,” Coco noted. 

Moving fast is important because idea iteration is essential in a new product. Even good ideas on paper can fall apart when put to the test. According to Coco, “Some great ideas in theory just fall fast once you back-test them. It is important to fail fast.” 

Understanding VettaFi’s suite of services 

VettaFi has a large suite of services, ranging from indexing to digital distribution. Through a data and analytics platform and the biggest conference in the business in Exchange, VettaFi is well suited to being a full-funnel partner. According to Dietrich, this increases the partnership possibilities. “We generally want to partner with firms across the entire lifecycle.” 

Watch the Replay Here. 

VettaFi offers a comprehensive suite of issuer services, ranging from indexing to digital marketing. In addition, it boasts one of the largest advisor behavioral databases and hosts the industry's most valuable conference, Exchange. It’s a company well suited to be an asset manager’s partner throughout the product lifecycle – from ideation and production to launch and distribution.

Interested in learning how to partner with us? Click here.  

In-person events are back

Live, in person events are more than just back. They are thriving. As business returns to normal, asset managers have more reason than ever to take advantage of the opportunities that conferences and other live events offer.

VettaFi CMO Jon Fee speaks to ETF issuers daily and understands the importance of live events. Here are the four big reasons that asset managers should sponsor Exchange according to Fee.

1. Jump start your annual plan

It is rare to have so many people from one industry all at the same place at the same time. Though opportunities for fun abound, conferences are supremely useful vehicles for progressing sales goals.

Beyond just meeting with your ecosystem partners, conferences can be an ideal venue to get a significant number of client meetings in one fell swoop.

The number one challenge I have is getting in front of clients. At Exchange, I can get in front of existing clients and meet new prospects more easily than traveling for a month
Past sponsor

Exchange is the perfect venue to conduct critical business and move things forward with the financial advisor segment. 

2. Brain plasticity

Travel creates brain plasticity. When brains are engaged in activities outside of their typical routine, neurons are more open to making different connections. Accordingly, when we travel or get outside of our normal routines, we’re more open to new ideas or finding different approaches to problem-solving.

“I attend conferences like Exchange to take a pause, get out of the office, and focus intentionally on practice innovation,” said Autumn Soltysiak CFP®, Partner and Wealth Management Advisor at & Wealth Management.

If there are deals or ideas that have been stuck in a rut, trying to make them happen in a different circumstance could yield a different result.

3. Get your brand in front of a captive audience

A conference is the ultimate canvas for branding – and if they take place early in the year, like Exchange, they can be an excellent opportunity to kick-start your annual marketing and distribution campaigns directly to your target audience.

As a complement to your broader marketing strategy, marketers can bring their brand to life with custom, curated experiences at a live event. They provide asset managers with an opportunity to be creative with swag and they are a great tactic to get your products and ideas in front of a captive audience.

Key financial publications and media outlets come to conferences in droves, which provides opportunities to secure features of your spokespeople and thought leaders – rounding out your marketing campaign with earned media. ETF issuers can amplify messages through media partners and extend your message further than just the conference itself.

4. Touch base with your ecosystem partners

Online meetings have become the norm. Though a lot can be accomplished online, in-person meetings offer different opportunities and have perks that Zoom or Teams calls can’t replicate.

A conference provides an opportunity for asset managers to touch base, in-person, with all of their ecosystem partners – from market makers and index providers to listing exchanges and data platforms. So much goes into a product at every stage of development. Conferences are the perfect venue to explore new potential partners or revisit existing partnerships.

This year, an asset manager and sponsor of Exchange, noted, “I get more meetings and business done in two and a half days at Exchange than in two months back in my NY office!”

In-person conferences are a highly efficient option to hold partner meetings at scale. Interested in sponsoring at Exchange? Let us know here. 

The new normal

VettaFi’s Cinthia Murphy, Todd Rosenbluth, and Saleem Khan explored the new normal for marketing to advisors in a recent webcast geared toward asset managers.

Khan shared that according to McKinsey, 75% of consumers recently switched to a new store, product, or buying behavior. “That’s a pretty significant change,” he said. Seventy-one percent of consumers also expect personalized interactions, with 76% expressing frustration when this doesn’t happen. "The bottom line here is personalization matters more than ever,” Khan added.

Marketing efforts now need to extend across the funnel

Asked where they plan to focus their marketing efforts, brand building, content creation, lead generation, and in-person events all lost big to “all of the above.” Murphy noted, “This is a multi-pronged effort. It takes a lot of moving parts to do effective marketing.” Achieving brand success demands well-coordinated efforts across media tactics, ensuring that no opportunity to engage your audience is overlooked.

The VettaFi impact on marketing efforts

VettaFi has positioned itself to be a partner throughout a product’s life cycle. “From a product standpoint, we’re focused on asset manager / issuer enablement,” Khan said.

Digital marketing is now critical for issuers looking to scale. It is a significant part of how asset managers build brand and get their products in front of the right advisors at the right time. Murphy pointed out that, with over 3,665 U.S.-listed ETFs from 249 issuers and 359 brands, standing out can be a challenge. Having the right data and tools to make your distribution effort as efficient as possible is more important than ever.

She also pointed out that, of the 400 ETFs launched so far in 2024, only 18% have reached $100 million AUM. “It's a tough, competitive landscape,” she added.

Related: 7 ETF marketing tactics to attract investors

The full funnel

The webcast also covered a range of strategies that can be used to create a full funnel marketing plan. For example, issuers can use digital ads to maintain brand awareness while also having a third party editorial team, such as VettaFi, write about the market news in a way that contextualizes the use case for a specific product to help with mid-funnel efforts. Data driven efficiencies can be leveraged to make lower funnel efforts more successful.

Digital events can provide a wealth of data and demonstrate lower funnel intent. "What we at VettaFi do is bring the advisor community that cares about learning online with the asset managers that want to communicate online," Rosenbluth said. Having an independent, third party host known for its award winning research can help issuers reach new potential clients. 

Learn more: Marketing tactics for asset managers

End goal: Reaching financial advisors

“There are many ways to reach financial advisors,” Murphy explained, “but none of them is a silver bullet.” According to a survey, advisors have a wide range of preferences on how they keep informed. In other words, webinars, emails, websites, videos, wholesaler visits, and social media all matter.

Content remains critical in this digital world. Accordingly, issuers that frequently generate blogs and thought leadership have more success connecting with financial advisors.

“One of the ways that we at VettaFi can help is that we have third-party websites that allow you to convey the message either with your own content or in working with our team of writers, experts, and research folks that can help communicate this level of expertise in a digestible format,” Rosenbluth said.

Watch the full replay here >

 

Webcast are a compelling medium

As markets have become more complex, investors have diversified their sources of information. More than ever, thought leaders and experts are sought out for their expertise. There are many useful ways for issuers to get their thought leaders in front of investors, but webcasts have become a uniquely compelling medium.

Here are three reasons why advisors prefer webcasts:

1. The opportunity for direct connection

Reading a white-paper, though informative, comes with a degree of detachment. Being able to see someone break down a complex idea or unexpected market conditions live is remarkable. Webcasts also frequently have space for questions and answer sessions. Accordingly, this means that advisors can get the precise information they need. It also makes them feel as though they are “in the room” with the expert. 

Another feature often offered for direct connection are polling questions. Webcasts are more than a platform for issuers to let advisors know about their products, they are also a medium for advisors to communicate their interests and needs to issuers through polling questions. As an issuer, this feedback provides a better understanding of your audience to refine strategies or positioning points. 

2. Webcasts can achieve multiple goals at once 

Good film writers know that every line of dialogue must do multiple things. Dialogue that merely advances the plot is clumsy. If it is advancing the plot and informing character development, while also providing background exposition, audiences are more likely to eat it up. The same is true of thought leadership in asset management.

Time is extraordinarily valuable, particularly for financial advisors. Webcasts accomplish multiple goals in a condensed time frame. Not only is the advisor gaining the necessary information for their practice and clients, but they can also earn CE credits. That is a much more appealing use of their time, especially when registering is free. Asset managers can also achieve multiple goals. Not only, are you able to position your product in front of an interested audience, but you're also developing a targeted list of advisors for sales follow up conversations. This reduces the number of cold calls and can shorten the sales cycle.

3. Replays are clutch 

The ability to go back and reference a webcast replay allows advisors to reference the material again, as well as allows other advisors to view material if they could not join live. Webcasts give advisors something they can come back to again and again, as needed, which creates a nice long tale for sales possibilities. The replay is also valuable to use and promote across your channels including on your website, social, and email.

More and More Asset Managers are Leaning on Webcasts

As issuers become more aware of the value webcasts present to advisors, they have become an increasingly vital component of an overall distribution strategy. Webcasts connect advisors directly to the experts, attendee lists can be used for prospecting, replays can be used for additional content creation and promotional efforts.

At VettaFi, we provide asset managers virtual event services to reach advisors, including end-to-end CE-approved webcast production and promotion services. We've been hearing from partners and clients about the need to purchase professional services online to improve efficiency. As a result, we now offer online purchases of our webcast services.

Learn more about our webcast services.

Most issuers that are just getting started have to make challenging choices about where and how to focus their resources. This can lead to penny wise but pound foolish decisions. Often a full funnel, digital marketing strategy is put in a “nice to have but not required” category when it should be considered an essential.

Here are three big reasons why small issuers need embrace digital marketing:

Reason #1: Digital marketing meets prospects where they are - online

Growing your AUM is impossible if investors can not find your product or know where to look for it. Increasingly, financial advisors and investors conduct most of their business online. If you want people to learn your brand name and become familiar with your logo, then advertising on websites advisors frequent can help. If you want people to learn about your products, there needs to be articles and thought leadership available to them online on places they are already routinely visiting.

Reason #2: To compete with the big dogs, you must act like a big dog

The desire to refrain from resource spend is reasonable. But, at the end of the day, if you want to compete in a crowded space, you need to behave like you belong. Sometimes this can feel risky, but the right partnerships can pay dividends as they help draw attention to your products and generate hot leads.

Related: 7 ways ETF marketing tactics that attract investors

Reason #3: Innovative new products need ambassadors

Smaller issuers often enter the market with unique ideas that fill gaps in the investor toolkit. However, explaining these innovations clearly can be difficult, making it challenging for sales teams to both pitch and contextualize the product simultaneously. Engaging experts and thought leaders to discuss the product on webcasts or explain its benefits through written content can help investors and advisors understand it before the sales pitch even starts.

Are you a newer asset manager looking to increase your footprint? Here’s how VettaFi can help you in your digital marketing efforts.

Research and development drive solutions

The VettaFi RavenPack Innovation Indexes focus on companies that invest heavily in research and development (R&D). R&D investment drives innovative solutions that can help companies outperform their peers over time.

Investing in research and development to spur innovation and growth

A company's investment in research and development and innovation can be a strong driver of outperformance, but typically a company's financials fail to capture the full story. Traditional, human-based approaches for identifying companies with significant exposure to innovation often fall short.  Data-driven, natural language processing (NLP) techniques like the ones utilized by Ravenpack offer a more efficient and comprehensive solution. This includes leveraging alternative data sources and employing advanced algorithms that identify innovation in real time.  

How to measure innovation

Both the U.S. Large Cap and Small-to-Mid Cap (SMID) versions of the VettaFi RavenPack Innovation Indexes rely on a news-driven systematic procedure to identify company innovation. Utilizing a volume-based, size-adjusted measure of media attention that tracks intellectual property, RavenPack assigns daily Innovation Scores to companies based on its proprietary NLP algorithm. This scoring mechanism is used to select and concentrate Index and Sector exposure in the companies that have the highest levels of reported innovation.

Performance

The VettaFi RavenPack Large Cap Innovation Index (VRLIIT) combines the RavenPack Innovation Score with sector, security weight, and turnover constraints and rebalances on a quarterly basis.  In backtesting, the Index outperformed the VettaFi US Equity Large-Cap 500 Index (SNR500) benchmark, on a since inception basis, in all but one year. 

Interested in learning more about the VettaFi Ravenpack Innovation Indexes? Speak to our index specialists today.

Broader client servicing and index offerings

VettaFi’s Index team is committed to serving our clients where they are, in their local markets. The recent acquisition of iNDEX Research and Development (iNDEX) not only extends the servicing reach for our clients, but also brings a new set of capabilities along with a world class team of professionals with decades of index experience.

VettaFi’s Index Factory is built on a modern tech stack enabling us to build, iterate, and deliver solutions to our clients quickly yet with strict data governance oversight. iNDEX Research and Development also invested heavily in technology and research which expands our existing equity solutions and expands our capabilities across global fixed income and multi-asset classes. iNDEX adds a new set of analytics and tools to our existing capabilities that will enable us to expand our offering and service our global clients more efficiently across times zones.

Fast, efficient services around the world

Issuers looking to develop or iterate on indexes value fast backtesting and reliable servicing. VettaFi Indexes have earned a reputation for its fast turnaround times and excellence service.

Now, with an expanded team capable of servicing the EMEA time zones, we are making the necessary investments and incremental steps of being a truly global index provider.

This will benefit asset managers around the world as they look to find new benchmarks or create indexes that can ballast their products. The new reach promises further speed and efficiency for VettaFi’s partners.

Furthermore, iNDEX has indexes tethered to $10 billion in products spanning fixed income and equities. The Index Factory is now positioned to help issuers create, iterate, and improve upon unique fixed income products with exposure around the world, including bond indexes, fixed duration, risk adjusted strategies based on rates, inflation, and credit ratings.

iNDEX adds value

This acquisition of iNDEX marks the third major indexing firm acquired by VettaFi, which had previously acquired ROBO Global Index Suite and EQM Indexes in 2023.

Tom Hendrickson, President, VettaFi, said in a press release, "The acquisition of iNDEX Research adds new talent as well as operational and client service capabilities focused on European time zones. We look forward to supporting and partnering with even more clients around the globe as we continue to bring VettaFi's offering to Europe and beyond."

Yaniv Kunis, founder and CEO, iNDEX Research, added, "As we embark on this next chapter, I am excited for the entire iNDEX Research team, and for the enhanced value we can deliver to our clients and the global investment community."

Take advantage of VettaFi’s Index Factory

As asset managers look for the right indexing partners to build and innovate with, VettaFi’s Index Factory now offers even more.

Interested in partnering with us? Talk to our team here.

Today's data challenge

In today's world, data is abundant. The challenge is not collecting and capturing data, but stitching it together and deriving insights that help inform decision making. 

 When surveying asset managers, the top 3 challenges they face when leveraging data include:  

  • Limted actionable insights
  • Lack of data expertise and/or resourcing
  • Siloed or inconsistent data

It's not a surprise that many firms are struggling with the same issue. But it's not hopeless. Asset managers can easily tap into subsets of behavioral data to drive distribution efficiency.  

How to tap into behavioral data

Let's use sales teams as an example. We recently partnered with an emerging asset manager in a niche corner of the alternatives market to improve their sales performance. With a small team, their sales department was stretched thin chasing leads. They knew they had a good product, but getting momentum was proving challenging; they were burning valuable time and resources pursuing cold leads and dead ends.

By leveraging our third-party behavioral data, their sales team was able to better identify and prioritize interested advisors when prospecting. We provided them with access to third-party data from a large proprietary pool of financial advisors, and an outsourced analysis of that data. 

With this information, our partner: 

  • Obtained a list of financial advisor leads who, through digital engagement and behavioral data, had indicated interest in related products – including competitor products, as well as their own.
  • Prioritized this list based on engagement – leveraging a proprietary engagement score that ranks and weights different types of actions.
  • Identified which advisors were looking into alternatives and eliminated advisors who had no interest in the alternative space.

By focusing sales teams' outreach efforts to prospects who have shown some interest, asset managers can shorten sales cycles and ensure distribution resources are operating efficiently. 

"We were able to secure five qualified opportunities in our pipeline and got four additional meetings set. There was a clear connection to engagement. We knew they were looking at our funds and funds like ours, and that made it easy for us to get our message in front of them."

Value of data partnerships

Finding partnerships that enhance data utilization or provide data clarity can be highly beneficial. Whether you are a small team striving for efficiency or a larger institution seeking a competitive edge, using data to streamline your sales cycle can drive growth in AUM. VettaFi offers data and analytics services that can help asset managers elevate their products to the next level. 

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“Behavioral data” has become a popular term. In this guide, we will help you fully understand not only what behavioral data is, but how it can be deployed to improve marketing efficiency and grow your AUM.

What is behavioral data?

Behavioral data refers to information collected about the actions, activities, and habits of individuals or groups. Every action someone does online is a behavioral data touchpoint. Clicking on a link in an email or downloading a new app are discrete pieces of behavioral data. You can also think of digital behavioral data as “digital body language.” 

This type of data is often gathered through various methods such as tracking online activities, observing consumer interactions or monitoring user engagement with digital platforms. Organizations collect and analyze behavioral data to gain insights into consumer preferences, habits, and trends. This information is valuable to make informed decisions in areas such as marketing, product development, user experience optimization, and personalized recommendations. However, it’s important to handle behavioral data ethically and responsibly, ensuring compliance with privacy regulations and maintaining transparency about data collection practices.

Businesses are harnessing behavioral data to better understand and reach current and prospective customers.