Paul Baiocchi of SS&C ALPS Advisors - ETFs: Growth Prospects, Obstacles and the Future of the ETF Marketplace

May 21, 2024

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Today Rusty & Robyn are joined by Paul Baiocchi, Chief ETF Strategist at SS&C ALPS Advisors in Denver, CO. Paul Baiocchi is the Chief ETF Strategist at SS&C ALPS Advisors, spearheading the firm’s distribution strategy and execution for the ETF suite as well as the Select Sector SPDRs lineup of ETFs. Paul works closely with the distribution, research and marketing teams to tailor the firm’s messaging and client-facing content for the varied needs of a range of investor types. In addition to providing subject matter expertise in client meetings, Paul supports the marketing and PR teams while also aiding the research efforts of SS&C ALPS Advisors and Select Sector SPDRs. Prior to joining the firm, Paul was Vice President of ETF Business Development at Fidelity Institutional Asset Management where he helped build and grow the firm’s ETF lineup for six years while developing sales and messaging strategies for sector investing. Previously, he worked at ETF.com, building an ETF analytics platform, writing about the ETF industry and moderating panels at Inside ETFs conferences. Paul has been in the financial services industry for 20 years. He is a CFA charter holder, holds an MBA from the University of British Columbia’s Sauder School of Business and a bachelor’s degree in Business Administration from California State University at Chico.

Key Takeaways

[03:12] - Paul’s professional background and what led him to focus on ETFs, in particular.
[07:04] - What is SS&C’s investment philosophy and how does it stand out as a firm?
[10:40] - Paul’s overall outlook for the ETF industry moving forward.
[14:42] - Where does Paul see innovation developing in the ETF industry moving forward?
[16:20] - What are some of the obstacles to growth that Paul sees for ETFs going forward?
[19:10] - SS&C ALPS offer more than 50 ETFs. Of this selection, where is Paul seeing the most growth and why does he think that is?
[23:30] - Which of the aforementioned strategies are not seeing as much growth and why?
[27:22] - Paul’s outlook on Active ETFs for 2024 and his thoughts on the evolution of Active ETFs as a category.
[30:55] - What are some potential catalysts that might encourage Small Caps to start regularly outperforming?
[34:48] - What are the risks of being in Small Cap indexing strategies, like the Russell 2000 or the S&P 600?
[37:26] - What is Paul’s overall outlook on non-US stock markets, both in absolute and relative terms?
[41:00] - What is currently Paul’s favorite investment idea?

Quotes

[15:42] - “There’s the ongoing sort of debate, and I have this debate myself, around tokenization of investment strategies [and] whether or not you can tokenize an asset class…Can you create a tokenized asset class of an ETF offering that allows you to provide that investment strategy in another format? That to me is another piece of innovation that might be 5 or 6 years down the road, or 10 years down the road, but is another driver of innovation as I see it.” ~ Paul Baiocchi

[26:12] - “Here we are in 2024, facing significant supply pressure on a number of key categories in the commodities space. We’re seeing energy prices start to bubble up again [and] we are also seeing weakness in specific commodities, namely natural gas…So the ability to be flexible in terms of what commodities you have exposure to, based on a really actionable model that the index uses to pick and choose among commodities, I think is a really compelling way to diversify an asset allocation, and we know historically that commodities can add a certain level of diversification to an asset allocation.” ~ Paul Baiocchi

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Disclosure(s) - Orion Portfolio Solutions, LLC, an Orion Company, is a registered investment advisor.

1168-OPS-5/13/2024