Episode summary
Record ETF Inflows, Industry M&A, and the Launch of a New Exchange
ETF Prime
· · 1 hr 5 min · Hosts: Nate Geraci, Simeon Hyman · Guests: Todd Rosenbluth, Brian Casey
Summary
The episode opened with a broad look at ETF industry trends: overall inflows are already around $1.43 trillion and on pace to break last year’s record, while fixed income ETFs have set a new annual high above $440 billion. The host and a guest argued that the leaderboard still shows investors favoring familiar, market-cap-weighted large-cap US exposures, even as equal-weight and active strategies continue to gather assets. They also highlighted the strength of options-based products and the continued demand for lower-cost index funds.
A second theme was consolidation. The guest tied recent deals such as Goldman Sachs buying Innovator and Neos, T. Rowe Price buying FM, and Victory Capital’s pending First Eagle deal to distribution, differentiation, and fee levels. The guest said more targets could emerge among firms with distinctive ETF strategies, and also flagged potential consolidation in crypto ETFs.
The interview then shifted to Westwood’s launch of the Westwood Salient Enhanced Power and Infrastructure ETF, PWRX, which will be the first ETF to list on the Texas Stock Exchange. The guest said the fund is built around a decade-long power and infrastructure buildout, uses covered calls on about half the portfolio, and targets roughly a 5% monthly yield.
Key takeaways
- The host said ETF inflows are nearing a record, with fixed income ETFs already above $440 billion for the year.
- The guest argued that the top of the ETF leaderboard still favors large-cap US index exposure, despite concerns about concentration and valuations.
- The guest said recent ETF M&A reflects the value of combining distribution with differentiated products, especially in options and fixed income.
- Westwood’s new PWRX ETF is designed to capture a long-duration power and infrastructure buildout and will list first on the Texas Stock Exchange.
- The guest said Westwood expects the strategy to pay about a 5% monthly yield through a covered-call overlay on roughly half the portfolio.
Notable quotes
“this has been a great year for fixed income ETFs already”
“it is hard to gather assets in the ETF industry”
“we pay that yield monthly. So, it's around 5%. That's our target”
How the episode opens
You were correct. This has been a great year for fixed income ETFs. I will give you the first of many congratulations on on getting this call right.
All right. Joining me will be Brian Casey, CEO of Westwood Holdings Group, which is a publicly traded investment and wealth management firm with about $18 billion in assets under management and advisement. That includes an ETF platform where they currently offer three ETFs, nearly $500 million in assets.
Uh they also have a partnership with Web's Investments who has another two ETFs. But tomorrow, tomorrow, Westwood is launching the Westwood Salient Enhanced Power and Infrastructure ETF, ticker PWRX, PowerX. And besides the ETF itself, what is noteworthy here is this will be the first ETF to launch on the brand new Texas Stock Exchange, Texi, where live trading began back in July, but this will be the first ETF launch there.
And so Brian and I are going to discuss the uh decision-making behind launching and listing PowerX on this new exchange. I want to find out what he thinks Texi means for the ETF industry overall and what it means for the state of Texas. And then we will certainly get into that ETF and the Westwood ETF platform overall.
Uh this should be a great conversation with Brian who he's been CEO at Westwood for over two decades. So, no shortage of experience and perspective that he can provide on all of that. Now, to start this week, I'll be joined by Todd Rosenluth, head of research at Vetify, and we are going to bounce around on some recent ETF industry milestones and news and events.
Uh there's been a lot going on in the space recently, as there always is. And so, we thought it'd be fun to catch you up on some of the big stories and offer up our hot takes.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- etf inflows
- industry m&a
- etf launches
- power & infrastructure etf
- texas stock exchange
Companies and tickers mentioned
- VettaFi
- Westwood Holdings Group
- Texas Stock Exchange
Watch the episode
Watch “Record ETF Inflows, Industry M&A, and the Launch of a New Exchange” 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.
