This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

ETF Insiders Explain Where the Industry Is Headed

NEW YORK ( TheStreet) -- One of the things that makes the ETF industry important and interesting to be a part of is that it is a disruptive force in the investment world.

Earlier this week I had the chance to visit with executives from three ETF providers, and I asked them all the same question: Where do you believe ETF investors want the industry to go and what are you specifically doing to participate in that perceived vision?

Jeremy Schwartz, chief investment officer of WisdomTree Investments

Schwartz said ETFs provide transparency, liquidity, tax efficiency and low cost. He stressed transparency, asking rhetorically, "Do you want more transparency?" ETFs are generally cheaper than traditional mutual funds, and Schwartz says this creates a better "investor experience."

Schwartz said WisdomTree's role in the future will be to continue to add value to low-cost "beta." In this context, beta equates to basic index exposure such as buying the SPDR S&P 500 (SPY).

One recent example of how WisdomTree's funds add value is the Wisdom Tree Small Cap Earnings Fund (EES), which has outperformined its benchmark, the iShares Russell 2000 ETF (IWM), by more than 350 basis points in 2013.

Obviously, not every fund can outperform all the time, but WisdomTree has had long-term success with quite a few of its funds.

Bruno del Ama, CEO of Global X Funds

Del Ama also noted the starting-point benefits of ETFs, including transparency, liquidity, tax efficiency and low cost. In terms of Global X's role in the development of the industry, he says that passive broad exposure has been covered. His firm's clients have not come to Global X looking for another S&P 500 fund.

Several years ago specialized and even esoteric funds started coming to the market offering the opportunity for anyone to create a "sophisticated" portfolio.

This has been a democratizing force for investors and a positive development for his firm. Early to realize this opportunity, Global X's first fund was the FTSE Colombia 20 ETF (GXG), which came about because Global X saw demand for investment products targeting Colombia. Global X's founders knew investors who were willing to buy other, less-than-ideal investment products to gain exposure to this Latin American economy.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs