Episode summary
Multi-Share Classes & the Road Ahead for ETFs
ETF Prime
· · Hosts: Nate Geraci, Simeon Hyman · Guests: Todd Rosenbluth, Paul Baiocchi
Summary
The episode centered on the pending multi-share class structure, where more than 70 fund companies have filed to offer an ETF share class of an existing mutual fund, or the reverse. Todd Rosenbluth said he expects the first approvals in the fourth quarter and thinks the SEC may move firm by firm rather than with a batch decision. He framed the structure as a way to give investors another wrapper around the same portfolio, while preserving the existing shareholder base and potentially improving tax efficiency.
Both speakers stressed that the change is operationally and strategically complicated. The guest warned that firms need real ETF capital markets, distribution, and platform readiness, and that not every issuer will be prepared on day one. The host argued that investors will still need to do homework because the wrapper choice matters for taxes, liquidity, and fees, even if the underlying strategy is the same.
The second half shifted to ETF industry trends and Alps’ lineup. The guest argued that whiter space still exists in electrification infrastructure, natural resources, and defensive sector allocation, while also noting that ETF competition is getting harder as issuer count rises and platform economics tighten. He also said crypto remains on his radar mainly through tokenization and infrastructure, not just coin-specific products.
Key takeaways
- Todd Rosenbluth expects the SEC to approve the first multi-share class filings in the fourth quarter, likely starting with a few firms rather than a batch.
- The guest said the biggest risk is not the wrapper itself but whether issuers have the legal, operational, capital markets, and distribution infrastructure to support it.
- The host and guest agreed that investors in existing mutual funds may benefit from ETF tax efficiency, but new buyers should be careful not to rush in blindly.
- Paul Baiocchi said ETF competition is intensifying as issuers multiply, platform economics worsen, and fee compression may plateau or reverse.
- Baiocchi sees continued opportunity in themes like electrification infrastructure, natural resources, and sector-level defensive positioning rather than just broad market beta.
Notable quotes
“I think this is going to be in the fourth quarter”
“there's probably a couple of firms that help to set the pace and the tone and hopefully give asset managers and investors more confidence”
“these will be actively ma all of these ones that have been filed are actively managed products and that will be fully transparent”
How the episode opens
Yeah, like first and foremost, Nate, timing is everything and this thing launches in April kind of around the bottom of the market. So, we benefited from a performance perspective from the market finding a bottom and rallying pretty aggressively off of that. All right, joining me will be Paul Bayaki, chief ETF strategist at SSNC Alps Advisors, who currently offers 25 ETFs, over $18 billion in assets.
And we'll get into this, but it's truly a unique lineup. So they have everything from an equal sector weight ETF to an electrification infrastructure ETF, an MLP ETF, a natural resources ETF, dividend focused ETFs. There's some very interesting strategies and Paul himself is a longtime industry veteran.
He's a fantastic ETF resource. And so we're actually going to touch on some broader topics this week, including where he sees room for further ETF innovation and how issuers can effectively compete as more products are coming to market. Uh we'll also get into crypto ETFs along with the multi-share class structure.
And then I do want to spend at least some time covering a few of those Alps ETFs as well, which I think you'll enjoy because Paul always does a great job of tying their ETFs into the current market environment. I feel like he always approaches things from a macro level first and then how their ETFs can be a solution. So he'll join me here in a bit.
To start this week, I'm joined by Todd Rosenblau, head of research at Vatify. And speaking of the uh multi-share class structure, if you haven't been paying attention to this or or maybe you have no idea what this even is, don't worry. We are going to bring you fully up to speed on everything going on here because this will be a huge story once the SEC approves this, which theoretically could be any day now.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- multi-share class etfs
- etf structure
- etf growth
- fund innovation
- investor and issuer impact
Companies and tickers mentioned
- SSNC
- VettaFi
- SS&C ALPS Advisors
Watch the episode
Watch “Multi-Share Classes & the Road Ahead for ETFs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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ETF Prime, this episode and its artwork belong to Nate Geraci. Octagon is not affiliated with the show; this page is an independent summary.
