The first two days of trading for the ETF Industry Exposure & Financial Services ETF (TETF) saw volumes open at 18,000 and increase to 25,000 on the second day.
“We are very excited” says Mike Venuto (pictured), CIO of Toroso Investments, whose firm created the idea and concept behind the ETF. “The idea of the fund is that it gives anyone who wants it access to the growth trend of ETFs,” Venuto says.
The product started with its index. “The index research came first,” he says, “which explains why so many people are involved. We made it a research tool first and a product second.”
‘So many people’ refers to the panel which oversees the Index, a committee made up of industry veterans, including Venuto; Guillermo Trias, CEO of Toroso Investments; Linda Zhang, Founder of Purview Investments; Kris Monaco, Founder of Level ETF Ventures; and Kevin Carter, Founder of Big Tree Capital.
“It’s all about trying to capture the public companies where revenue from the ETF ecosystem is flowing,” Venuto explains, using the example of Vanguard, which isn’t a public company but whose service and trading companies are public, and the exchanges through which the shares flow, or on which the indexes lie are public.
“The idea is that not every penny of an ETF is from its expense ratio. We’re not interested in capturing every ETF but in capturing the revenue created by the eco-system,” Venuto says.
The first days of trading an ETF are probably dominated by retail investors but clearly the providers are hoping for institutional support. “This is really aimed at anyone interested in participating in the growth of the industry. If you have paid attention and seen 20 per cent annual growth, that is what we have tried to recreate,” Venuto says.
The index is largely dominated by the US ETF industry at the moment. “There is no hard rule but those are the purest plays we could find,” he says.
“Other companies, including non-US companies, might come into the Index in the future, but we came out with what our research showed as the best representation of the industry first.”