01 October 2025

At The Money: The Flood of New ETFs

1Frameworks

8Insights

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Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 1

Myth Buster10:31

Why Someone Else's Mutual-Fund Exit Can Raise Your Tax Bill

A large mutual-fund redemption can force the fund to sell securities and realize gains. Those gains are distributed among the investors who remain, causing them to owe tax despite taking no action themselves; the ETF creation-redemption mechanism largely avoids this outcome.

Large redemptions can force mutual funds to sell holdings
Realized gains pass to investors who remain
Investors may owe tax without selling their own shares
ETFs generally isolate investors from other holders' redemptions
Tax deferral is valuable even when lifetime tax is unchanged

“They end up paying taxes because you left, because you created a capital gain for everybody.”
Dave Kndig · 11:17

“an ETF that simply doesn't happen. So it is a simply a fairer mechanism.”
Dave Kndig · 11:41

#taxes#mutual funds#capital gains#etfs

Hot Take· 2

Hot Take02:39

A Quarter of Flow Revenue Is Going to ETFs Charging Over 1%

Kndig evaluates industry economics by calculating the revenue implied by recent fund flows. He estimates that roughly a quarter of that revenue now goes to products costing more than one percent, showing how lucrative speculative and derivatives-based ETFs have become.

Revenue can be evaluated from recent flows and product fees
About 25% of implied flow revenue goes to products charging over 1%
High fees are concentrated in speculative strategies
Industry marketing emphasizes lucrative specialized funds

“Twenty five percent of the imply revenue from flow is going to products that cost over one percent really”
Dave Kndig · 02:56

“what's getting launched tends to be very speculative.”
Dave Kndig · 03:12

#fees#fund flows#asset management#revenue

Hot Take12:34

Nearly Every Tradable Exposure Is Heading Toward an ETF

Kndig argues that ETFs are the most efficient structure yet developed for packaging exposures and trading them on exchanges. Tokenization may eventually duplicate parts of the system, but only assets unsuitable for daily trading, such as some private credit or real estate, appear likely to remain outside it.

ETFs efficiently package exposures for exchange trading
Tokenization may replicate rather than eliminate the ETF model
Illiquid private assets remain important exceptions
ETF evolution increasingly defines the future of asset allocation

“the ETF structure is the most efficient vehicle we've come up with for taking exposures and getting them traded on exchanges”
Dave Kndig · 12:54

“Everything else is going to be an ETF.”
Dave Kndig · 13:32

#asset management#tokenization#liquidity#future of investing

Explainer· 4

Explainer00:22

Why the ETF Market Is Heading Toward Thousands of New Funds

Six hundred ETFs launched during the first eight months of 2025, with the full-year total expected to rise further. The growth reflects an industry expanding beyond inexpensive index exposure into higher-fee and increasingly specialized strategies.

Six hundred ETFs launched in eight months
The annual total could reach eight hundred or nine hundred
Most new launches are expensive specialized products
Product count is growing faster than the core index market

“There were six hundred new ETFs launched in the first eight months of twenty twenty five”
Barry Ridlts · 00:22

“Almost all of those products are very expensive.”
Dave Kndig · 02:09

#etfs#fund launches#asset management

Explainer04:15

Crypto ETFs Are Expanding Beyond Spot Bitcoin

Crypto ETFs are moving from spot Bitcoin into Ethereum, Solana, staking-related structures, and potentially many additional coins. Accelerated or default listing standards could let issuers bring ETFs for the next tier of crypto assets to market rapidly.

Spot Bitcoin currently holds most crypto ETF assets
Ethereum and Solana products are expanding the category
Staking structures seek fees or interest from crypto assets
More spot crypto ETFs may launch within six to twelve months

“That ecosystem of crypto products is going to get very complex very quickly.”
Dave Kndig · 04:46

“Before you it's going to be a free for all.”
Dave Kndig · 05:07

#crypto#bitcoin#solana#sec#etfs

Explainer06:21

Single-Stock Variations Could Add Thousands of ETFs

A permissive launch environment allows issuers to engineer numerous return patterns around individual stocks. Combining leverage, inverse exposure, income, and protection across hundreds of stocks could produce several thousand funds even before competing issuers duplicate each variation.

Single-stock ETFs modify exposure rather than merely holding one stock
Possible variations combine leverage, income, and downside protection
Six variations across 500 stocks imply thousands of products
Competition could create multiple funds for every variation

“we're gonna launch all the things.”
Dave Kndig · 06:54

“I think by this time next year we could have several thousand more ETFs than we do right now.”
Dave Kndig · 08:05

#single-stock etfs#leverage#options#regulation

Explainer08:48

Share-Class Relief Could Convert Thousands of Mutual Funds into ETFs

ETF share classes allow mutual funds and ETFs to point to the same pool of assets, preserving mutual-fund compatibility for retirement plans while adding ETF efficiencies. With Vanguard's patent expired and dozens of applications before the SEC, standardized approvals could trigger a rapid wave of launches.

Some retirement plans require mutual-fund fractional shares
An ETF share class can share the mutual fund's asset pool
Vanguard previously held a patent on the structure
Pending applications could generate thousands of ETF share classes

“An ETF share class pointing at the same pool of assets.”
Dave Kndig · 09:39

“it would be about five or six thousand new ETFs.”
Dave Kndig · 10:26

#share classes#mutual funds#vanguard#sec#retirement

Takeaway· 1

Takeaway05:10

IBIT's Breakneck Growth Shows the ETF Wrapper's Custody Advantage

BlackRock's IBIT accumulated assets at a pace comparable to or beyond earlier record-setting ETFs such as GLD. Its appeal to institutions and advisers comes partly from placing Bitcoin exposure inside familiar accounts without requiring direct on-chain custody.

IBIT reached roughly $82 billion after launching near $5 billion
Its dollar growth may be the fastest recorded for an ETF
The ETF structure resolves custody problems for institutions
Investors can hold crypto exposure inside existing accounts

“I think I Bit and bitcoin as a class has really kind of blown all those things out of the water”
Dave Kndig · 05:41

“they love the ETF because it solves all of their custody issues.”
Dave Kndig · 06:01

#ibit#bitcoin#custody#institutions