Nate Geraci, president of The ETF Store and host of ETF Prime, dives into the future of ETFs with intriguing predictions for 2025. He discusses the potential launch of private credit ETFs and the ever-evolving crypto landscape. The conversation heats up around fee competition among major players like BlackRock and Vanguard, and the innovative strategies behind single-stock ETFs. Nate also highlights the need for investor education on the complexities of 351 exchanges, promising an insightful look into the dynamic ETF market.
Nate Geraci predicts competitive pressures will lead iShares or Vanguard to reduce S&P 500 ETF fees to attract more investors by 2025.
The emergence of new cryptocurrency ETFs in 2025 is fueled by favorable regulatory conditions and growing demand among younger investors.
Deep dives
The Importance of Discipline in Success
For alpine skier Michaela Shiffrin, success embodies the values of discipline, teamwork, and intrinsic drive rather than external recognition. Achieving success is a collective endeavor that involves surrounding oneself with supportive individuals who can foster growth. Shiffrin's perspective aligns with the ethos of Stiefel, a rapidly growing wealth management firm, which emphasizes investing in advisors to enhance client outcomes. The belief is that genuine success emerges from a strong foundation of collaboration and dedication.
Predictions for the ETF Market
Nate Geraci predicts significant movements in the Exchange-Traded Fund (ETF) market for 2025, suggesting that either the iShares or Vanguard S&P 500 ETFs may reduce fees to gain a competitive edge over SPY. He believes that lower fees could attract more investors, as competitiveness in asset management often hinges on cost efficiency. The ongoing battle for supremacy among these ETFs indicates a pressing need for issuers to leverage investor trends and market demand effectively. This prediction highlights the crucial role of fees in influencing investor choices and market dynamics.
The Rise of Crypto ETFs
Nate Geraci forecasts 2025 as a pivotal year for cryptocurrency ETFs, suggesting that multiple new offerings, including spot Solana and XRP ETFs, will emerge. This surge is thought to be supported by a potentially more favorable regulatory environment under the Trump administration, which could focus on pro-crypto policies. The general sentiment is that the proliferation of crypto-based products will cater to rising demand among younger investors who consider cryptocurrencies a crucial portfolio asset. This expansion reflects the increasing mainstream acceptance of cryptocurrencies and the desire for diversified investment options.
Innovations in Tax Awareness in ETFs
A relatively new concept in ETFs is the 351 exchange, which allows investors to convert individual stocks into ETF shares without triggering tax liabilities. This can be particularly advantageous for long-term holders of highly appreciated stocks looking to mitigate potential tax impacts while achieving diversification. However, the acceptance and popularity of such innovations may take time due to educational barriers among investors. The predicted rise in these tax-aware strategies within ETFs underscores an evolving landscape where tax efficiency becomes a central theme for high-net-worth investors.
Will the first private credit exchange-traded fund launch in 2025? How many new crypto-related ETFs will come to market this year? And how will the battle of the S&P 500 funds shake out? Will BlackRock’s iShares Core S&P 500 ETF cut fees in an effort to stop Vanguard’s S&P 500 ETF from passing State Street’s SPDR S&P 500 ETF in assets?
On this episode of Trillions, the discussion leaves no stone unturned. Eric Balchunas and Joel Weber—along with cross-asset reporter Vildana Hajric—grill Nate Geraci, president of The ETF Store, over his five big predictions for 2025. The heated debate also explores single-stock ETFs and a maneuver called “351 exchanges.”