In this edition of the Investments Roundup, we speak with Jon Fee, CMO of VettaFi, our Investment Solutions Leader of the Month, about the latest strategies in the world of ETFs.
This edition of the Investments Roundup also features HFR reporting on hedge fund performance in February, LPL launching an alternative investments platform, Genstar staking First Eagle, Cerulli commenting on Unified Managed Households, Janus reporting on fixed income, Franklin Templeton introducing a crypto ETF, CFRA on private credit and money market ETFs, Goldman introducing a buffered ETF, Fidelity launching ETF model portfolios, Morningstar releasing its 2025 investment conference agenda, and SMArtX partnering with BondBloxx.
Larry’s Take
As we celebrate WSR’s fourth anniversary, no asset class in the past four years of our coverage has been so volatile as cryptocurrency. Crypto in April 2021 was a completely different creature from the crypto of today, with different investors, much friendlier government approaches, more mainstream adoption and – of course – ETFs.
Franklin Templeton announced its third ETF, featuring bitcoin and ether, as reported below. Four years ago, we wouldn’t have dreamed of such an established name on a crypto product. At the same time, the ticker symbol for the new ETF – “EZPZ” – shouts out to the irreverent ethos of past crypto investors.
The current pro-crypto administration will eventually change, and crypto still suffers pullbacks as dramatic as its runups. Despite its widespread acceptance, it’s not for the faint of heart, and it is still on plaintiffs’ firms’ radar. If you’re bringing clients into this space, get good compliance advice first, and make sure your clients truly understand this asset class.
If you would like to discuss this Larry’s Take further, including how these trends might impact your business, please contact me at larry.roth@rlrstrategicpartners.com.
Investment Solutions Leader Of The Month, Jon Fee, Discusses The Exchange ETF Conference
VettaFi was founded in 2022 by merging teams from ETF Trends, ETF Database, Alerian and S-Network Global Indexes. VettaFi later acquired Advisor Perspectives, ROBO Global Index Suite and EQM Indexes. It was acquired by TMX Group in 2024.
Jon Fee joined VettaFi as Chief Marketing Officer in 2022. He previously held positions as SVP and Head of Global Marketing at Salesforce and Managing Director at BlackRock.
We asked Fee about the upcoming Exchange ETF conference, as follows:
WSR: What niche does the Exchange ETF conference fill for the wealth management space?
Fee: Exchange is where finance becomes a community, a conference intimate enough for attendees to have meaningful conversations and large enough to welcome fresh faces and perspectives to strengthen and broaden the reach of that community. Exchange works directly with advisors to craft and provide feedback on our developing agenda.
Those FAs often take the stage themselves so our audience is part of a relatable learning experience, versus being ‘talked at’ by pros who don’t walk in their shoes. From portfolio construction to securing the right CEs, networking methods to practice development, Exchange aims to ask the questions and deliver solutions advisors want.
Exchange is designed to help advisors better understand the fast-moving world of ETFs. New strategies and approaches are being rolled out and geared towards the advisor community every day, but product needs to come with education, so the end clients can obtain the best possible outcomes.
WSR: What will the Exchange ETF conference focus on this year? What are some expected highlights?
Fee: Our 2025 agenda is tightly focused on professional and business growth for advisors. With a combination of deep market and portfolio strategy insights, advisors will be better equipped to provide informed and impactful opportunities for their clients. Our practice management and personal development sessions – from effective communication with retirees, young families and first-time investors alike, to marketing compliance and practice structure – will provide financial advisors at all levels with the tools for continued business growth.
On the ETF front, we’re bringing together all of the leading voices in ETF research and education, along with the teams building the funds and models that can solve some of the advisor world’s biggest challenges.
WSR: What is your personal role in the conference?
Fee: As the CMO for VettaFi, I am responsible for growth, research, content, investor engagement and building an undeniable brand. Across our platform, nothing encompasses these duties like Exchange — VettaFi’s industry leading conference. You will not only find me supporting my team and our agency partners delivering the experience, but also on stage, as well as having countless connects with our clients.
Hedge Funds Mixed In February While Crypto Drops, According To HFR
Hedge funds showed mixed performance in February due to volatility surging in response to new trade and tariff policies, according to HFR’s latest report. Equity markets fell, driven by growth and technology stocks.
The HFRI Fund Weighted Composite Index dropped -0.47% for the month, with drops in macro and equity hedge strategies offsetting gains in relative value arbitrage and event driven strategies. The HFR Cryptocurrency Index fell sharply -16.8%, which HFR attributes to rising volatility and steep declines in cryptocurrencies.
“Driven by trade and tariff uncertainty, hedge funds navigated volatile equity market trends and reversals in February, with gains across Relative Value Arbitrage and Event Driven strategies,” stated Kenneth J. Heinz, President of HFR. “With rapid and violent micro-cycles of oscillating risk off and on sentiment driving extreme volatility and dislocation across equity, fixed income, commodity, currency and cryptocurrency markets, funds remained tactically flexible and opportunistic in positioning with gains across specialized sub-strategies including active trading and volatility.”
LPL Financial Launches Alternative Investments Platform
LPL Financial announces the launch of an alternative investments platform, LPL Alts Connect, supported by SUBSCRIBE. The system provides a centralized, digital platform for alternative investment purchases to streamline the purchasing process.
LPL Alts Connect has features such as prequalification, e-signature capability, the ability to send sales kits to client emails and compliance review. It also includes educational resources about alternative investments for advisors and investors.
“With the launch of our new alternative investment platform, advisors have access to a shelf of tailored, institution-caliber opportunities that are aligned to the needs of high-net-worth and ultra-high-net-worth clients and designed to set advisors apart from the competition,” said Cheri Belski, Executive Vice President and Head of Investment Management Solutions for LPL. “As the expectations of investors continue to evolve, this platform will arm advisors with more sophisticated ways to serve their clients.”
Genstar Buys Majority Stake In First Eagle From Blackstone, Corsair
Genstar Capital buys a majority stake in First Eagle Investments, through private equity funds it manages, from Blackstone and Corsair. Those two firms, through their funds, have owned a majority of First Eagle Investments’ parent firm First Eagle Holdings since 2015.
First Eagle’s investment capabilities include equity, fixed income, alternative credit and multi-asset strategies. Its leadership and investment teams will stay in place. The firm’s founding families, as well as current and former employees, own the rest of the shares.
First Eagle’s “investment-led culture, market-leading investment solutions and broad distribution capabilities are differentiated among premiere investment managers,” said Tony Salewski, Managing Partner of Genstar. “We believe these attributes make First Eagle an ideal platform to capitalize on growth trends in the investment management industry, and we look forward to supporting the team on this continued journey.”
Managed Account Sponsors Prioritize Unified Managed Household, Cerulli Says
Working toward unified managed households (UMH) is a priority for managed account sponsors, according to Cerulli Associates’ “Cerulli Edge – The Americas Asset and Wealth Management Edition.” In 2024, more than half (52%) of sponsors surveyed called UMH a top-three priority, up from 44% in 2022. However, platform sponsors face substantial resistance in meeting this goal from advisors as well as technology integration challenges.
Sponsors’ concerns about developing UMH platforms for advisory assets include having all the necessary technology enhancements working well in combination (89%) and the burden of unwinding legacy platforms (42%). UMH programs’ changing definitions and functional demands compound these hurdles.
“Nearly everyone can agree that asset location optimization and tax-loss harvesting are core elements of a UMH, but beyond these, answers begin to differ as to how to treat rebalancing across accounts — some of which may reside in brokerage platforms rather than in the advisory program or at another provider altogether,” said Scott Smith, Senior Director, Advice Relationships at Cerulli.
Janus Finds Securitized Credit Topped Fixed Income Sectors In 2024, While Global Agg Lagged
In the fixed income world, securitized credit and sub-investment grade sectors gained last year, while longer-duration assets fell back and the U.S. and Global Aggregate Bond Index posted a loss, according to Janus Henderson. In its report, “Top-performing U.S. fixed income sectors of 2024: Securitized outpaces the Agg,” John Kerschner, Head of US Securitized Products & Portfolio Manager, and John Lloyd, Lead for the Multi-Sector Credit Strategies & Portfolio Manager, reviewed U.S. fixed income performance in 2024.
High yield and bank loan sectors outperformed, due to strong economic data and corporate fundamentals. Dollar-denominated emerging markets debt also did well, especially in countries with improving fundamentals and ratings potential, and sub-investment grade countries. Meanwhile, the Global Agg was the only major index to fall as its foreign currency exposure suffered from a U.S. dollar rally.
Looking ahead, “First, we believe it is important to maximize income per unit of risk and limit drawdowns in the present environment,” the report said. “Second, we think allocating to sectors that are trading at cheaper relative valuations – such as loans over high yield, CLOs and ABS over corporates, and agency MBS over Treasuries – will be key in 2025.”
Franklin Templeton Launches Franklin Crypto Index ETF
Franklin Templeton launches the Franklin Crypto Index ETF (EZPZ), which provides exposure to the price movements of bitcoin and ether. The firm has over $32 billion on its ETF platform with over 100 ETFs and 11 specialist managers.
EZPZ is the firm’s third digital asset ETP launch in just over a year. The Franklin Bitcoin ETF (EZBC) launched in January 2024, and the Franklin Ethereum ETF (EZET) launched in July 2024.
“EZPZ offers a convenient and low-cost way to gain exposure to the two most established and largest blockchain ecosystems,” says David Mann, Global Head of ETF Product and Capital Markets at Franklin Templeton. “In the longer-term, the ETP [exchange traded product] intends to add any new coins as they become eligible for index inclusion. It is our hope this ETP evolves to represent beta for crypto.”
CFRA: February Sees 81 ETF Launches Including Private Credit And Money Market ETFs
The latest CFRA Research says 81 U.S. ETFs launched in February, including State Street’s new private credit ETF, the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV). Prior to this launch, private credit ETFs held either Business Development Companies (BDCs) or Collateralized Loan Obligations (CLOs), but State Street created a new approach to regulatory requirements for these instruments.
BlackRock launched two money market ETFs — iShares Prime Money Market ETF (PMMF 100 NR) and iShares Government Money Market ETF (GMMF). They are the first ETFs to comply with the SEC’s 2a-7 money market fund requirements after the launch of the Texas Capital Government Money Market ETF.
In the equities ETF space, “Abrdn entered the U.S. equity ETF asset class with two product launches. The firm’s prior ETF launches in the U.S. were focused on the commodities space,” said Aniket Ullal, Head of ETF Research & Analytics at CFRA Research in the report. “Cohen & Steers, which is well known for its real estate funds, was a new entrant to the ETF industry, with the launch of three products focused on real estate, preferred shares, and natural resources.”
Goldman Sachs Launches Third Active Buffered ETF
Goldman Sachs Asset Management expands its active ETF offerings with the launch of its Goldman Sachs U.S. Large Cap Buffer 3 ETF. GBXC is the firm’s third actively managed buffered ETF. Like the others, the new product tracks the S&P 500 Index but includes a structured options strategy that seeks to limit downside risk.
Unlike buffered ETFs with annual resets, the three Goldman products reset every three months. The U.S. Fund Defined Outcome Morningstar category topping $58.4 billion in assets, demonstrating that buffered ETFs have increased in popularity with investors seeking structured equity participation.
“With major equity benchmarks near all-time highs, our clients are looking to buffer strategies, which maintain equity exposure while also managing potential downside risk,” said Oliver Bunn, Portfolio Manager and Global Head of Quantitative Investment Strategies Alternatives at Goldman. “Our active buffered ETF suite offers a series of quarterly resets, allowing investors to enter at multiple points throughout the year while maintaining a clear, defined understanding of their potential risk and return.”
Fidelity Debuts Two All-ETF Model Portfolios
Fidelity Investments launches two all-ETF model portfolio suites — Fidelity Target Allocation ETF Model Portfolios and Fidelity Target Risk ETF Model Portfolios. The model portfolios are designed for risk profiles ranging from capital preservation to aggressive growth. The firm points to data showing that ETF allocations are rising, with 53% of advisor portfolios leveraging ETFs as of the fourth quarter of 2024, up from 44% in 2023.
The firm launched its first model portfolio in 2018. Since then, Fidelity says it has grown its turnkey model portfolios by 120% to meet advisors’ growing interest. Fidelity has assets under administration of $15.1 trillion.
“ETFs continue to be an increasingly attractive option for advisors due to their cost and tax efficiencies,” said Amanda Robinson, Vice President of Portfolio Solutions at Fidelity Institutional. “These new model portfolios offer advisors a streamlined way to execute an ETF strategy while also meeting the evolving needs of their clients.”
Morningstar Conference Highlights Convergence Of Public And Private Markets, Investment Trends
The 37th annual Morningstar Investment Conference will occur June 25 to 26 at Chicago’s Navy Pier. The agenda includes themes such as the merging of public and private markets, new approaches to value creation in asset management, transformative developments in retirement planning, and the ongoing influence of geopolitical dynamics on investment decisions.
Morningstar CEO Kunal Kapoor will host a fireside chat with Apollo Global Management CEO Marc Rowan on the expanding options to diversify clients’ portfolios into private markets. Dana Emery, CEO of Dodge & Cox, will join a panel on the debate between active and passive strategies. Christine Benz, Director of Personal Finance and Retirement Planning at Morningstar, will host a discussion with HerMoney Founder and CEO Jean Chatzky and Life Planning Partners Founder Carolyn McClanahan.
“Key trends like the convergence of public and private markets are again at the heart of our agenda, helping advisors navigate the shifting needs of their clients,” said Kunal Kapoor, CEO at Morningstar. “We’re thrilled to welcome a stellar lineup of speakers and deliver an event that sparks meaningful conversations about the investing landscape and the shifting tides that are on investors’ minds.”
SMArtX And BondBloxx Partner On Multi-Asset Model Portfolios
West Palm Beach, Florida-based SMArtX Advisory Solutions and Larkspur, California-based BondBloxx Investment Management partner on multi-asset model portfolios. Under the partnership, SMArtX combines BondBloxx’s ETFs with U.S. equity SMAs/ETFs in an open-architecture approach. The new BASE Portfolios are comprised of three modular sub-portfolios that provide duration exposure, credit exposure and equity exposure.
SMArtX’s UMA technology provides a cloud-native, modular platform for RIAs, asset managers and fintech firms. BondBloxx focuses solely on fixed income, offering exposures to U.S. Treasurys, investment-grade and high-yield corporate bonds, emerging markets bonds, tax-aware strategies and private credit.
“The investment industry has been in need of what BondBloxx has created,” said SMArtX Chief Investment Officer Dan Phillips, “We finally have at our disposal the fixed income ETF tools required to truly meet our clients’ specific needs.”
Wealth Solutions Report can be reached at info@wealthsolutionsreport.com.
