In a recent episode of Behind the Ticker, Kirsten Chang, Director of Editorial and Content at VettaFi, shared insights into her journey from CNBC to her current role, as well as details about the upcoming Exchange ETF Conference, the largest ETF industry event of the year. With over a decade of experience at CNBC—working on Squawk Box, covering markets from the floor of the NYSE with Bob Pisani, and helping launch ETF Edge—Chang transitioned to VettaFi to further develop her own voice and contribute to the growing ETF landscape.

Chang explained that VettaFi is more than just the organizer of the Exchange conference. It serves as an index provider, a data analytics firm, and a digital distribution company focused on bridging the gap between advisors and ETF issuers. With over 4,000 ETFs available in the market, VettaFi helps investors and financial professionals sift through the noise by offering research, webcasts, and educational content. Through its partnerships with asset managers, the firm provides timely insights on ETF flows, market trends, and new product developments.

The discussion then shifted to the Exchange ETF Conference, now taking place in Las Vegas after years in Miami. Chang highlighted that the conference is designed to offer advisors actionable insights and analysis, with sessions covering everything from private credit and hedge fund-led multi-asset ETFs to the explosive growth of active ETFs. The event brings together the biggest names in the industry, including keynote speakers like David Kelly and Ian Bremmer, and features panels on thematic investing, ESG trends, crypto, AI, and international equities. With record-breaking fixed income ETF flows and the continued rise of AI-related investments, the conference aims to provide a roadmap for advisors navigating today’s markets.

Chang also emphasized Exchange’s focus on networking and community building, calling it the must-attend event for anyone in the ETF space. She shared details on new initiatives like the Putt for Pink charity event benefiting Susan G. Komen, a March Madness basketball connect-four game hosted by State Street, and an interactive app that allows attendees to schedule meetings and customize their experience.

In a recent episode of Behind the Ticker, Adam Patti, founder and CEO of VistaShares, discussed the launch of the VistaShares Artificial Intelligence Supercycle ETF (ticker: AIS) and how it differentiates itself in the growing AI investment space. With over two decades in the ETF industry, Patti previously founded IndexIQ, one of the earliest issuers of liquid alternative ETFs, which was later acquired by New York Life. After spending several years outside the industry, Patti partnered with John McNeil of DVX Ventures to launch VistaShares, focusing on building high-quality thematic ETFs with a more thoughtful and targeted approach.

Patti explained that AIS is designed to provide pure exposure to the AI supercycle by focusing exclusively on the infrastructure driving artificial intelligence, particularly in data centers and semiconductors. Unlike many AI-themed ETFs that hold broad tech exposure dominated by the "Magnificent Seven" stocks, AIS takes a supply chain-driven approach, investing in companies that manufacture the essential components—such as GPUs, VRAMs, cooling systems, and fiber optic networks—needed to power AI. By analyzing the bill of materials for AI data centers and semiconductors, VistaShares identifies companies with substantial AI-driven revenue, ensuring that the fund is directly tied to AI growth rather than being diluted by large-cap tech names with only partial AI exposure.

AIS follows a rules-based, actively managed strategy that combines systematic supply chain analysis with an active overlay. The core portfolio is constructed based on a transparent, rules-driven methodology—one that VistaShares has filed for a patent on—ensuring that holdings are determined by their relevance to AI infrastructure rather than arbitrary weightings. The fund undergoes a semi-annual rebalance, but Patti emphasized that the active overlay allows for adjustments in response to new developments in the rapidly evolving AI space. The investment committee, which includes AI industry practitioners such as former Tesla president John McNeil and AI entrepreneur Sonny Madra, helps identify emerging trends, new players, and risks within the AI ecosystem before they become widely recognized.

Patti also highlighted the global nature of the AI supply chain, with AIS holding companies from the U.S., Taiwan, China, and Europe. Currently, about 60% of the portfolio is U.S.-based, with the remainder distributed across key AI manufacturing hubs. Looking ahead, VistaShares has the flexibility to expand the portfolio’s focus, potentially incorporating consumer-facing AI applications and energy solutions as the industry matures. However, for now, the fund remains centered on AI infrastructure, which Patti believes is still in the early stages of exponential growth, as evidenced by record-breaking capital expenditures from major tech firms.

For investors and advisors looking to incorporate AIS into portfolios, Patti suggested a 3-5% allocation within a core equity strategy, positioning it as a high-conviction growth satellite.

n a recent episode of Behind the Ticker, Emma Harper, a research analyst at Sage Advisory, shared insights from the firm’s 2024 ETF Stewardship Report, which evaluates how ETF providers engage with companies, vote on shareholder proposals, and integrate sustainability and governance practices. With a background in finance and research, Harper plays a key role in Sage's analysis of responsible investment strategies, ensuring the firm’s investment decisions align with best stewardship practices. Sage Advisory, which manages approximately $28 billion in assets, focuses on institutional and retail clients, blending investment management with rigorous research.

Harper explained that Sage’s annual stewardship report examines ETF providers' voting and engagement practices, governance structures, and transparency efforts. The report analyzes how asset managers influence corporate behavior through proxy voting, engagement strategies, and sustainability considerations. One key aspect of the research is assessing whether providers have dedicated stewardship teams and clearly defined voting policies. Given that ETF holders delegate their ownership rights to fund issuers, understanding how these rights are exercised is crucial for fiduciary responsibility.

A major trend identified in the 2024 report is a decline in transparency among ETF providers, particularly in response to regulatory scrutiny and political pressures. Harper noted that while early versions of the report saw growing disclosures from asset managers, recent years have shown a more cautious, legalistic approach to describing stewardship activities. Additionally, there is a widening divide between active and passive ETF managers, with active managers generally exhibiting stronger stewardship practices. Passive managers, on the other hand, tend to rely more on third-party proxy advisors and have less direct engagement with portfolio companies.

Harper also highlighted concerns about the concentration of voting power among a few major ETF providers, such as BlackRock, Vanguard, and State Street. These firms control trillions of dollars in assets and exercise substantial influence over corporate governance. The report found that larger providers tend to support management more often than smaller firms, which raises questions about their commitment to shareholder advocacy. Harper emphasized that investors should carefully evaluate ETF issuers’ stewardship policies, particularly as issues like ESG, artificial intelligence, and cybersecurity become more relevant in corporate decision-making.

In a recent episode of Behind the Ticker, Rob Arnott, founder and chairman of Research Affiliates, shared insights into the firm's latest innovation, the Research Affiliates Deletions ETF (ticker: NIXT). With nearly 50 years in investment management, Arnott has built a reputation for pioneering quantitative investing strategies, particularly through the development of the Fundamental Index methodology. Research Affiliates, founded in 2002, now indirectly oversees $158 billion in assets through partnerships with firms like Schwab, Invesco, and PIMCO.

Arnott explained that NIXT was created to exploit inefficiencies in traditional market-cap-weighted indexes. When companies are removed from major indices like the S&P 500 or Russell 1000, they often experience exaggerated price declines, pushing them to deep value levels. Historically, these "deleted" stocks tend to recover significantly, often outperforming the market in the years following their removal. NIXT systematically captures this mean reversion by identifying and investing in stocks that have been dropped from indices due to temporary underperformance rather than fundamental deterioration.

The fund follows a rules-based process where deletions from the top 500 and top 1,000 market cap rankings are screened for quality metrics, eliminating the bottom 20% to avoid value traps. The remaining stocks are then held in equal weight for five years, allowing time for revaluation and recovery. Arnott noted that this approach benefits from both the structural inefficiencies of index deletions and the broader opportunity in small-cap and deep value stocks, which are currently trading at historically low relative valuations.

Arnott positioned NIXT as a unique completion strategy, complementing traditional market-cap-weighted portfolios by reintroducing stocks that indices have discarded too soon. While not intended as a core allocation, NIXT provides an alternative way for investors to gain small-cap value exposure with a systematic, contrarian approach.

n a recent episode of Behind the Ticker, John Davi, founder and CIO of Astoria Advisors, discussed the firm's latest ETF launch, the Astoria US Quality Kings ETF (ticker: GQQQ). With over two decades of experience in quantitative investing and asset allocation, Davi founded Astoria in 2017, building a firm focused on macro-driven and quantitative investment strategies. Managing approximately $2 billion in assets, Astoria serves financial advisors, institutions, and ultra-high-net-worth individuals.

Davi explained that GQQQ was created to address a gap in the growth investing space. While many existing growth ETFs are purely market-cap weighted, GQQQ combines growth with a quality filter, ensuring exposure to high-growth companies while maintaining fundamental financial strength. Unlike broad Nasdaq-based ETFs, which include all non-financial large-cap stocks without quality screening, GQQQ applies quantitative selection criteria focusing on return on equity (ROE), return on assets (ROA), and return on invested capital (ROIC). This results in a portfolio that captures growth opportunities while reducing exposure to weaker companies.

The ETF blends large-cap and mid-cap stocks, aiming to identify the next generation of market leaders. Davi highlighted AppLovin as an example—GQQQ included the stock in its launch portfolio in October 2023, months before it was added to the Nasdaq 100, allowing early participation in its strong performance. By including mid-cap growth names, GQQQ seeks to capitalize on emerging winners while mitigating the concentration risks seen in traditional growth ETFs dominated by the "Magnificent Seven" mega-cap tech stocks.

Davi also emphasized the risk management strategies within GQQQ. The ETF undergoes an annual rebalance with quarterly quantitative reviews, allowing for adjustments when stocks significantly de-rank in quality metrics. While not a tactical allocation product, this process ensures that the fund remains aligned with its quality-growth mandate. He positioned GQQQ as a complementary holding to existing growth ETFs like QQQ or Vanguard's growth ETFs, offering a more refined and risk-conscious approach to growth investing.

For advisors and investors looking to incorporate GQQQ into their portfolios, Davi suggested it as a way to diversify traditional growth exposure, especially given the heavy concentration in a few stocks within broad-market growth indices.

In a recent episode of Behind the Ticker, Mike Loukas, CEO of TrueShares, shared insights into the firm’s journey and the unique approach behind their ETFs, including their latest launches, QBUL and QBER. Loukas, with over 30 years of experience in the financial industry, founded TrueMark Investments in 2019 with the purpose of establishing TrueShares as a solutions-based ETF platform. TrueShares aims to take traditional active strategies and institutional hedging techniques and incorporate them into ETFs that offer investors smarter portfolio construction tools.

Loukas explained that TrueShares’ ETF lineup started with fundamental active management products and expanded to include thematic and structured outcome ETFs. Their defined outcome or buffered ETFs have been popular among investors seeking downside protection while maintaining exposure to equity growth. Most recently, the firm launched QBUL and QBER, two quarterly resetting hedged equity ETFs designed to offer principal protection with directional market exposure.

QBUL aims to capture market gains beyond a 5% threshold within a quarter while maintaining treasury-level downside protection. In contrast, QBER generates positive returns when the market drops by more than 5%. Both funds use a structure where principal is invested in treasuries, and the yield is used to purchase out-of-the-money call options (for QBUL) or put options (for QBER). This approach ensures low risk exposure with the potential for asymmetric returns based on market movements.

Loukas highlighted the flexibility of these ETFs within a portfolio, explaining that they can be used as standalone investments or blended with other asset classes to create diversified, risk-adjusted strategies. Advisors can use QBUL in bullish markets to enhance upside potential while maintaining principal security, and QBER in bearish markets to hedge against significant declines without taking on the risks associated with shorting the market.

In a recent episode of Behind the Ticker, Catherine LeGraw, asset allocation strategist at GMO, shared insights into the firm’s approach to value investing and their newly launched ETFs, including GMOV, their U.S. value ETF. LeGraw, who joined GMO in 2013 after working at BlackRock and Barclays Global Investors, brings a top-down perspective to asset allocation, seeking valuation-driven opportunities across asset classes. She emphasized GMO’s commitment to long-term value investing and its employee-owned structure, which allows the firm to focus solely on clients’ best interests.

LeGraw explained that GMOV stands out among value-focused ETFs due to three key differentiators. First, GMO takes a top-down approach, looking for entire groups of dislocated or misvalued stocks, rather than relying solely on bottom-up stock selection. Currently, the fund focuses on the cheapest 20% of the market, which GMO believes represents a tremendous opportunity for deep value investing. Second, the firm does not rely on standard accounting data but instead restates financials to reflect true underlying value, such as treating research and development expenses as investments rather than operating costs. Lastly, GMO incorporates forward-looking projections tailored to each company’s unique characteristics, providing a more accurate estimate of future profitability.

GMOV also applies rigorous portfolio construction techniques to balance deep value opportunities with quality and growth characteristics, avoiding common value traps. LeGraw highlighted GMO’s use of proprietary red flag screening, which examines accounting metrics, management behavior, and market signals to identify potential risks. The fund consists of approximately 150 names, with sector weightings determined by valuation attractiveness rather than traditional market cap constraints. Unlike many passive value ETFs that may be overweight in sectors like utilities, GMO’s active approach allows them to avoid sectors they consider overvalued.

In addition to discussing the U.S. market, LeGraw also touched on GMOI, their international value ETF, which she believes offers an even greater opportunity given the relative cheapness of international equities and the potential tailwind of currency valuation shifts. She emphasized that value investing is currently priced for significant outperformance, with deep value trading at historically attractive levels.

For advisors and investors looking to diversify their portfolios away from an overconcentration in U.S. large-cap growth, LeGraw suggests GMOV and GMOI as substitutes for passive value exposure or as tactical allocations to capitalize on the current value opportunity.

In a recent episode of Behind the Ticker, Kevin Carter, founder of EMQQ Global, shared his journey into investment management and the inspiration behind his suite of emerging market internet ETFs, including INQQ, which focuses on India’s rapidly growing internet sector. With a background that began at Robertson Stephens in 1992 and included pioneering direct indexing and active indexing, Carter’s passion for emerging markets and digital transformation culminated in the creation of EMQQ Global and its targeted ETF offerings.

Carter discussed the investment thesis for INQQ, highlighting India’s unique position as the world’s largest and fastest-growing emerging market. With a population exceeding 1.4 billion, robust demographics, and a booming middle class, India presents unparalleled opportunities for consumption-driven growth. Carter emphasized India’s ongoing infrastructure and technological advancements under Prime Minister Modi, particularly the “India Stack,” a revolutionary digital public infrastructure. The stack has transformed India’s economy by enabling biometric identification, digital payments, and financial inclusion for over 800 million people in just a few years.

INQQ provides investors exposure to the burgeoning internet sector in India, which Carter described as being in its early stages of growth. The ETF focuses on publicly traded Indian internet companies that meet market cap and liquidity thresholds, offering a diversified portfolio across various verticals, including e-commerce, payments, and online travel. Companies like Paytm and MakeMyTrip exemplify the opportunities available as digital adoption accelerates, with many sectors still in the nascent stages of development.

Carter underscored the importance of INQQ as a standalone investment opportunity within emerging markets, appealing to those seeking targeted exposure to India’s digital transformation.