From Zephyr’s Adjusted for Risk podcast, Ryan Nauman interviews Roxanna Islam, Head of Sector and Industry Research at TMX VettaFi, about major ETF trends and what they mean for advisors. Islam explains VettaFi’s role in helping build and grow ETF products and highlights fast-growing areas including spot Bitcoin ETFs (launched January 2024) and the broader crypto ETF ecosystem, noting flow consolidation into larger funds like iShares’ IBIT amid a Bitcoin pullback, and differences versus Ether products. She also discusses the rapid growth of options-based ETFs, defined outcome/buffer ETFs, and a return to thematic investing such as AI infrastructure, space, and defense, including rising interest around SpaceX exposure. The conversation covers challenges of putting private markets/private credit into ETFs due to liquidity and transparency constraints, and clarifies tokenization as moving real-world assets onto blockchain rails, including a filing to tokenize the TBIL ETF.

Zephyr can help financial advisors locate the best Crypto ETF strategies for their clients. Learn more here.

Learn more about TMX VettaFi here.

00:00 Welcome and Setup

01:10 Meet Roxanna Islam

03:26 ETF Trends Overview

04:37 Crypto and Bitcoin ETFs

06:01 Options and Buffer ETFs

06:40 Thematic ETFs AI and Space

08:40 SpaceX Exposure via ETFs

11:02 Private Markets in ETFs

15:34 Bitcoin Pullback and Flows

21:45 Overcrowded Crypto Products

25:37 Tokenization Explained

28:40 What Advisors Should Do

30:18 Wrap Up and Resources

Connect with Ryan Nauman:

LinkedIn

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Let's go.

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video1443442472: Welcome, everyone,

to Zephyr's Adjusted for Risk podcast

3

from the shores of Lake Tahoe.

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I'm Ryan Nauman, the market

strategist here at Zephyr.

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ETFs have grown by leaps and bounds

recent, in recent years through,

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through innovation and new products.

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The growth has led to many hot

trends impacting the space, including

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active ETFs, buffered or defined

outcome ETFs, ETF share classes.

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It goes on and on.

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And then we have the inclusion of

private markets and much, much more.

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I have on an industry expert to

discuss these trends and what it

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all means for financial advisors.

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But first, this episode is sponsored

by the award-winning Zephyr, which

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helps investment professionals

make more informed investment

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decisions on behalf of their clients.

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I'd like to give a very warm

welcome to Roxanna Islam.

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Roxanna is the head of sector and

industry research at TMX VettaFi.

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Roxanna, thank you so much for coming on.

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Really looking forward to this

conversation for some time.

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Lot of great insight.

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It's gonna be a fantastic conversation.

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I was just at Exchange listening

to some of your sessions.

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A lot of, uh, great insight that

you have to share, so looking

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forward to this conversation.

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Can you, please tell us a little bit

more about yourself and TMX VettaFi?

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Yeah.

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Yeah, Ryan, great to be here.

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And yes, we saw each other a few

weeks ago down in- at Exchange,

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and it was great seeing you there.

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So VettaFi helps build and

grow ETF products, so we help

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connect asset managers with,

uh, investors across the globe.

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Some of our services include indexing,

uh, digital marketing, data and analytics.

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I work at VettaFi on the ETF

research team, so I cover anything

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from broad investment market

trends to anything ETF-related.

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Personally, I do like to focus

more on some of the equity

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strategies, specifically thematics,

and some of the alternative

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strategies like digital assets.

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Um, before VettaFi, I spent

some time in sell side research

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at a firm called Stifel.

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I covered transportation and

logistics stocks and later

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on electric vehicle stocks.

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Before Stifel, I worked at Wells

Fargo, where I also covered ETFs

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and closed-end fund research.

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So I kind of came full circle back,

uh, back into the ETF industry after

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being gone for a few years and it, it is

crazy how much we've seen change in that

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short period of time that I was gone.

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Yeah, Roxanna, you're exactly correct.

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So you like to focus on equities.

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What are you saying, the

fixed income side is boring?

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Well, to be fair, I did...

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I listed out of my, uh, my briefed

field, but I did start off as a

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fixed income research analyst,

uh, for a bit at Wells Fargo.

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So I think I'm, I'm a little

bit justified in saying it, it

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wasn't my, really my cup of tea.

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I love it.

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Well, at least you have the experience-

Yeah ... to say that it wasn't.

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You're just not saying it's not

your cup of tea because it's not.

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So I love it.

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Fantastic.

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So you are so exactly right about

just in that short amount of time

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how much the ETF space has changed.

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I'm gonna age myself here, Roxanna, but

when I started, you know, 20 years ago,

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it was just all the vanilla index-based

ETF spiders, the queues, stuff like that.

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And now it's a whole new world

for ETFs, and it's growing,

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evolving at a breakneck pace.

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What has been some of the biggest

trends that you are watching today

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that you think are the hottest trends?

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Yeah, I mean, there's, there's definitely

a lot going on in the, in the ETF world.

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And, you know, on one hand, I feel

like a lot of people, especially in the

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financial community, sort of look at

ETFs and they're like, "Wow, you can

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really put anything into an ETF now."

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There's a ton of different filings

and launches out there, many of which

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are, are very outside of the box.

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But, you know, I think there's some very

good substantial trends, um, that are

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happening in the ETF world, and those,

you know, stem from some of the, the

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good product innovation that we've, we've

seen from issuers, and also, uh, more of

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a demand for democratization from, you

know, the typical retail in- investor.

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So an area that I love to follow

is the crypto space, specifically

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the crypto ETFs and Bitcoin ETFs.

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Um, that space has really

exploded over the past few years.

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We've had, you know, blockchain

and crypto equity ETFs for a

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few years, but spot Bitcoin ETFs

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You know, for anyone listening who's

not really familiar with spot products,

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basically they give you exposure

to Bitcoin without you actually

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having to hold Bitcoin in a wallet.

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So it's similar to the way gold ETFs work.

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Um, someone somewhere holds those

gold, those gold bars in a vault,

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but you don't have to, so it

makes it a lot easier to track the

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investment and a lot more convenient.

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So this has really changed you

know, the, the ETF ecosystem too.

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It's, it's been a big impact because in

the short amount of time crypto's been

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there, it's really gained a lot of assets

and a lot of attention from investors.

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If you look at the, uh, the, the

biggest spot Bitcoin ETF, which

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is an iShares product, it's ticker

IBIT, even after the, the market

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pullback we've been having, it's,

you know, in the top 1% largest ETFs.

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Um, so it's just a huge

impact on the ETF industry.

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We also have things like, um, you know,

spot Ether ETFs, spot altcoin ETFs.

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We have, uh, multi-token

ETFs, crypto equity ETFs.

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It's a huge ecosystem right now, and it's,

it's all just very interesting to follow.

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Um, some of the other trends

that I think are very interesting

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are options strategies.

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You know, obviously you can, you

can trade options on your own,

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but it's a little bit complex.

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So ETFs make that easier.

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So we have seen this explosion of

options-based ETFs as well, things like

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deriva- derivative income products.

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Um, you know, that space has

over 150 billion in assets.

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Defined outcome or buffer ETFs

is also a relatively new category

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that- ... just emerged late 2018.

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That space is already

over 70 billion in assets.

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Um, so those are two, both very

large categories that, that

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we've been following recently.

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On the equity side, I am seeing a bit

of a return to thematic investing.

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Um, you know, this is an area that

I followed very closely, but it sort

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of has seen ebbs and flows since you

know, it was a little bit, I would say,

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over-hyped in the 2020 to 2021 timeframe.

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Um, you know, a lot of these themes, they

ended up being a little bit too niche

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or, you know, maybe a little bit too

broad and they just didn't make sense.

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But now I think we're seeing

some very, um, you know, good

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substantial themes that I think

investors can get their head around.

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So AI and AI infrastructure

is obviously one of them.

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Mm-hmm.

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Um, space is another one that, you know,

I've actually been following for a few

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years, but it's actually really seen sort

of more exposure over the past year or so.

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It's interesting because back in, you

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thematics was a little bit hyped, people

saw space as, you know, a way to play

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on, you know, space tourism- Mm-hmm

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um, the billionaire space race,

all those concepts that were

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a little bit out of the box.

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That is part of it, but, you know,

it's- Space is actually another

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layer of defense, and defense is

actually a, a huge theme itself.

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But, you know, you have, uh, you know,

areas like satellites, missile warning

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systems, communication networks that

make it a sort of a layer of defense

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that plays more on technology and

communications rather than something

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more niche like space tourism.

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And what's really interesting in the, uh,

the ETF world, prior to this year, there

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were only about three of these space ETFs.

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At least five more have launched just

this year, and it's, it's only been

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about, you know, four months this

year, a little bit over a quarter,

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which has been very interesting.

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And obviously, a lot of

that has to do with, uh, you

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know, SpaceX's potential IPO.

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That's, that's obviously bringing some

additional, um, attention to that space.

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So I think, you know, it's a, it's an

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Yeah.

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Roxanne, that's fantastic.

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So much there to unpack.

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I have so many questions and

comments about that number.

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Let's just start at the end.

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SpaceX, June potentially IPO.

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What...

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It's gonna have probably a huge impact

on these space ETFs, I would think, and

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maybe even the ETF space in general.

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But are you looking to see even

more space and defense ETFs go live

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with SpaceX being so popular and

everyone looking forward to it?

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Yeah.

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I see, I mean, I think

that could be the case.

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We've already seen, you know, like I said,

five ETFs in, in barely over a quarter.

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Um, so I think we could see

more launches potentially in

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the pipeline because of that.

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And obviously, we could see, you

know, SpaceX added as a potential

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holding to some of these ETFs.

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Um, one of them that recently launched,

which is ticker NASA, which is by the

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way a, a great ticker, that one already

holds, um, a portion of SpaceX in it.

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And then you also have a few other

non-space related ETFs that have exposure

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to SpaceX, primarily through, uh, SPV.

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So there's another one called

XOVR, which is from ER Shares.

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They have a pretty significant,

um, allocation to SpaceX.

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Um, so it, it is a, it is sort of

a, a hot topic in the ETF world,

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how to get exposure to, to SpaceX

before it actually goes public.

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Yeah.

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You know what, Roxanne, it, that goes

just to your point about earlier about

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the democratization of investing that

ETFs bring to the basic retail investor.

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Basic retail investor maybe five,

10 years ago, they won't even think

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about being able to get access to

SpaceX until prob- it, after it

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goes live on the secondary market.

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But now with ETFs, like you said, and-

We're gonna talk shortly about private

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investments, you know, options like you

said, a retail investor on their side

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trying to do a call or, those collared

ETF strategies, not really for them.

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But ETFs, you know, it makes it available

to them, these strategies that were

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once held for, you know, institutions.

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Yeah.

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Yeah.

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Yeah, definitely.

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Um, you know, I think this

has sort of been a big theme.

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I mean, ETFs have always

been about democratization.

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They've always been about providing

access to broader retail investors

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and not just institutional investors.

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They've also made, investments

like Bitcoin and gold, which

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I mentioned, easier to hold.

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So they've, they've always been about

ease of access and democratization.

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So, um, obviously, you know, private

markets has been, you know, one

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of the bigger trends that we've

seen over the past year or so.

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Um, and that's, you know, been in a, a

little bit of a difficult spot, I would

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say, over the past, uh, few months.

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Um, you know, we've seen some meltdowns.

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There's been some negative news in the,

in the broader, um, private market space.

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So it's, it's made it a little

bit difficult, um, I think

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in terms of ETF adoption.

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Even before that, I think, it's

historically a, a more niche

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category that was meant, you know,

for institutional investors and

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for ultra-high net worth investors.

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Um, it is true that obviously

retail investors are looking for

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access to some of these strategies

that were a little bit more gated.

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Um, but there's, there's a bit of

complexity and a little bit of a

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lack of transparency behind some of

these private market investments, um,

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that make it less attractive to hold

even though they might be interested

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in sort of the headlines behind it.

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Um, you know, obviously we've seen some

private credit try to be put into ETFs.

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I think, you know, we thought that

would, um, sort of help democratize,

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uh, the private credit and the

private market industry in general.

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But, you know, obviously there's some

structural reasons why ETFs, um, you

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know, aren't perfect for private markets.

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ETFs are meant to be, uh,

liquid, and private markets

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just aren't, aren't that liquid.

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So, um, you know, for example, there's

like a 15% illiquid security maximum that,

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you know, many of these ETFs can hold.

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So you can't really have like

a true private market ETF

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where it's 100% private market.

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It's more about providing you know, a

taste, providing exposure in an easy

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wrapper, and not fully replicating

some sort of institutional strategy.

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Um, so, you know, if you've- If you,

uh, think about one of the more,

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most popular, uh, private credit

ETFs that was launched recently, it

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was the State Street product, Privy.

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You know, that's actually a...

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It's actually not a pure play

private credit ETF, it's a public

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and private credit strategy ETF.

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So it offers you some exposure to

the private credit through their

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liquidity arrangement with Apollo.

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Um, and then when you look at some

of the other private credit ETFs out

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there, a lot of them actually use more

of, like, a picks and shovels approach.

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Like, they would invest in the, the

manager, or they would invest, um,

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you know, in BDCs or closed-end funds.

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It, they, they, they won't replicate

a full, you know, 100% private credit

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strategy that you might find in some

of these institutional products.

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Roxanne, that's great, and

such great information.

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I'm a firm believer in democratization

that we've already talked about.

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But like you said, it's

all about alignment.

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There's a lot of retail investors,

and we're seeing it right now

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in that private credit space.

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So I think it's a huge issue in

private credit, and there, it's a

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systematic, uh, risk in crisis, no.

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But I think what's going on

is there's that misalignment

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between the retail investor.

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And we're finding out right now that

retail investors, they want liquidity.

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Mm-hmm.

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And a lot of these products

aren't providing liquidity.

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Yes, the ETF wrapper does, but though

then 15%, when you add 15% into ETF

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wrapper and, you know, a private

credit sleeve, then you add that to a

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portfolio, are you really getting that

much, much exposure to private credit?

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Now, that's probably a

different conversation.

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But it may, you know, it's like...

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And it goes right back

to what you said earlier.

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Really gotta have to know

what you're investing in, that

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transparency in what's there.

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I think there needs to be more done

on the private markets, whether it's

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an ETF wrapper, uh, interval funds,

which there's a lot of issues there.

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BDC, like you said.

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I'm glad that there...

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Do you think that maybe product innovation

and, like you said, technology might

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help bridge that gap and bring ETFs and,

you know, remove some of those liquidity

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issues, or are we a long ways away?

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Yeah, and I think that's part of

it, and I think we're still very

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early in trying to bring true

private credit into an ETF wrapper.

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Um, you know, I think what State Street's

doing with their liquidity arrangements

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is, is, you know, something that's,

that's part of that broader evolution.

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But yeah, I think it's, it's still

very early, uh, to see what's

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going on with private credits

and private markets and ETFs.

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Exactly.

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And, but the ETF space, it

moves quicker than ever.

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So who knows when.

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Could be tomorrow and

there might be a solution.

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Who knows?

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Let's focus on crypto.

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You mentioned that's, you know,

you focus a lot on crypto.

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It's been an interesting couple of years.

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It's been longer than that.

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Crypto just i- interesting

thing to watch, view.

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But two years ago, crypto ETF

Bitcoin ET- spot ETFs were released.

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It's been a rollercoaster ride

this year for Bitcoin investors.

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Lower prices, it's been a rollercoaster.

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It's been a sell-off in Bitcoin prices.

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How has the lower prices influenced

investor appetite for Bitcoin ETFs?

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Yeah, I mean, obviously, when you

see lower prices, you will see some

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sort of change in investor behavior.

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I don't think we've completely

eliminated any sort of investor demand,

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but investors definitely are getting

a little bit more selective when it

288

comes to Bitcoin and crypto ETFs.

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Uh, you know, we talk about when

spot Bitcoin ETFs came to market,

290

which was only a couple of years ago.

291

Um, since then, you know,

the administration has been a

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little bit more crypto-friendly.

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Other financial institutions have

started, um, becoming more open to crypto.

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So we've just sort of started

becoming more mainstream with

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crypto, if you think about it.

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And this is the first major

crypto pullback, Bitcoin

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pullback, since that's happened.

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So it's-- I think when you're an investor

or even advisor that's, that's on the

299

fence, um, about Bitcoin and crypto,

and you're experiencing one of the first

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biggest pullbacks since you've invested

it's very, um, shocking, I would say.

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And then I would also say, you know- It

is a different story for spot Bitcoin

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ETF investors versus someone who maybe

was a more longer term Bitcoin investor.

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If you were a direct Bitcoin investor,

you might have bought Bitcoin when

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it was 15,000, 20,000, 30,000.

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It's 75,000 now, so even if, you know,

there was a pullback, you're still up.

306

Um, but if you were a spot Bitcoin

ETF investor, these came out

307

in January 2024, like we said.

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If, you know, you waited a couple

of months, you bought them in

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March 2024 right now almost all of

your returns would be about flat.

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Um, so the, the timing for, for

spot Bitcoin, if you were there

311

from the beginning, I think

that's what, what scares a lot of

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investors, is because you've lost

most if not all of your return.

313

Maybe you're not as

confident in holding Bitcoin.

314

But if we look at the flows, you

know, obviously there have been some,

315

some outflows in the category, right?

316

And it makes sense.

317

Um, you're seeing these investors being

spooked about these low Bitcoin prices.

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But we are seeing, um, still

some healthy inflows into the

319

largest, uh, iShares product, IBIT.

320

Um, that's had about 2 billion in

inflows year to date, while the

321

rest of the space has been losing.

322

Um, and you've, you're seeing some, like

the Fidelity product, FBTC, that has, you

323

know, almost the same amount of outflows.

324

So, um, you know, I would say what we're

seeing is a lot of consolidation into the,

325

the larger, more liquid players in the

space, and we're going to see IBIT keep

326

gaining some more of that market share.

327

I think right now out of its peers, it,

it has about 60% market share, and I think

328

we could see that increase in the future.

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Now, when you look at some of these

other cryptocurrencies like Ether,

330

for instance, Ether is a little bit...

331

It trades a little bit

more like a tech asset.

332

It's a little bit more volatile than

Bitcoin, so we are seeing more outflows

333

in that space, and we're not really

seeing the same sort of consolidation.

334

In fact, the, the inflows are actually in

Grayscale's, uh, Ethereum Mini Trust, and

335

I didn't mention it earlier but, uh, their

Bitcoin Mini Trust also has a, a little

336

bit of inflows in it, which is interesting

'cause these aren't the biggest products,

337

but they are the lowest cost products.

338

So I imagine that's, that tells you

that some retail investors are still

339

buying the dip and getting into

these products and, 'cause retail

340

investors, you know, they tend to care

about the more lower cost products.

341

But it, it's really interesting 'cause

I think this has sort of, uh, you know,

342

it's reinforced Bitcoin as, you know,

a different you know, a different asset

343

class compared to some of the other

cryptocurrencies like Ether and altcoins,

344

which are, you know, seeing considerably

more outflows than, than Bitcoin itself,

345

which is sort of seen as like the

digital gold large cap version of crypto.

346

Yeah, Roxana, that's great.

347

And- Do you think to- we have seen a big

pullback in Bitcoin, but like you said,

348

you haven't seen a ton of outflows either.

349

In fact, you know, the, the

iShares Bitcoin product is still

350

one of the largest ETFs out there.

351

Do you think it's now more because whether

it's retail investors, financial advisors,

352

they're just more educated on Bitcoin?

353

I did some research and stuff for a

few years ago about the impact Bitcoin

354

has on an investment portfolio,

and I'm big on the portfolio

355

construction, not just buying something.

356

Like, more the gambling side of it,

more the portfolio construction.

357

And that efficient frontier had

every portfolio along that efficient

358

frontier had a slice of Bitcoin,

even the most conservative.

359

So as more and more education comes out

there, they might be more willing to

360

ride out the waves of the volatility

knowing that, this is a piece of

361

the portfolio that's uncorrelated.

362

It's doing its job.

363

It's adding diversification and

not just shooting to the moon.

364

Yeah.

365

No, I, I definitely think that's the case.

366

And, you know, typically we see

retail investors hold Bitcoin in small

367

portions anyway, so it's, it's, it's...

368

I, I would say it's easier to

hold when something is, you

369

know, 1% to 2% of your portfolio.

370

Even if, you know, you do see some

pullback, it's not going to be...

371

you know, it's not gonna significantly,

um, throw off your portfolio.

372

Yeah.

373

That's a very good point.

374

And I do think that education, like

what you guys are doing at Vetify and

375

other places regarding Bitcoin, it

really helps because it does help,

376

uh, the overall diversification of a

portfolio and, like you said, 1%, 2%.

377

I don't know about much more than

that, but, uh, that's perfect.

378

So continuing along with crypto,

you know, there has been an influx

379

of new crypto products, and you

talked about some of the different

380

coins out there and, and products.

381

Do you think the space is getting a little

overcrowded here, or can it be sustained,

382

or do you think maybe we're having, uh,

too, too many products out there for

383

people that are trying to get into crypto?

384

Yeah.

385

I would say it's definitely overcrowded.

386

You know, in the past couple of quarters

we've seen 60, 60 new launches, and

387

I think now there's, there's well

over 150 crypto products when you

388

consider the broader ecosystem.

389

Um, and many of these products, especially

when you talk about the spot products,

390

they're very similar, um, and they

might have very similar fees as well.

391

So it, it's very hard to, to

differentiate amongst them.

392

Um, but there's still a lot of

product, uh, launches happening

393

now that hasn't really slowed down.

394

Um, a really interesting thing that

actually happened a few days ago was-

395

Morgan Stanley actually launched,

uh, a spot Bitcoin ETF, um, which,

396

you know, in most cases you would

think, well, it's a little bit late.

397

It's, it's been two years since, you

know, the, uh, the initial round of

398

spot Bitcoin ETFs were launched, and

first mover advantage is typically

399

very important when you're launching

pretty much identical products.

400

But you know, Morgan Stanley's product,

it actually came in at the lowest

401

fee, which makes a big difference.

402

They have a, you know, large

network of, of clients.

403

And I think right now it's already

gathered, um, like 100 million in assets.

404

So, you know, it's, it's, uh, it's

pretty interesting to see some of

405

these, uh, large financial in- financial

institutions enter the game this late on.

406

Um, I think it shows that, you

know, they still have confidence

407

in, in this, uh, this crypto market.

408

But you know, when we talk about

some of these smaller products,

409

I mentioned the altcoins.

410

I think, you know, this is sort of

where the floodgates had been opened

411

you know, la- late last year when the,

uh, the SEC changed some of its, uh,

412

generic, uh, uh, ruling standards.

413

So a bunch of these, uh, these, uh,

spot altcoins have been launched.

414

Um, you know, some of them a little

bit more popular than others.

415

Ones like XRP and Solana, for

instance, have been pretty popular.

416

Those, those, both of those

categories have about a billion in

417

assets right now, so, so not small.

418

Um, some of these other ones that have

been launched are very new, like you

419

have Chainlink, you have Dogecoin.

420

These have maybe one to three or

four months of trading histories,

421

and it's, it's a tough time also.

422

So there's not a lot of assets

going into them, understandably.

423

Um, but it's, it's a little bit

interesting because, you know, we're

424

not seeing a, a ton of outflows either.

425

So it's, it's like we're seeing

some minimal inflows, but then

426

we're seeing, um, we're seeing

assets hold where they are.

427

Um, so, so that's interesting to me.

428

Um, you know, people often ask do I think

there will be closures, and I do think

429

there will be some closures, and I think,

you know, that's just a, a typical part

430

of the, the ETF innovation cycle, right?

431

You s- you launch something.

432

Um, if it doesn't work, you close it.

433

Typically, that, that closure could

happen, um, you know, around the

434

year mark is, you know, 'cause

you, you tend to give it some time

435

to see if it can gather assets.

436

So a year from now, I think we might see

some more of these crypto ETFs close.

437

But you know, I, I'd say that I don't

expect to see a lot of closures in some

438

of these large crypto asset managers

like, like Grayscale and Bitwise,

439

um, because what they're doing is

they're building an ecosystem, right?

440

They're building...

441

You know, they have their Bitcoin

product, and then they have some

442

of their smaller altcoin products.

443

They're building out an ecosystem,

and I think it's, it's less likely

444

that we'll see closures in, in

those sort of asset managers, even

445

if, uh, the products are smaller.

446

Yeah.

447

That's a great point.

448

And there, it, it- Not only in

crypto and Bitcoin, I feel that

449

a lot of spaces within ETFs are

getting, somewhat crowded too.

450

So it'll be interesting to see how it all

plays out here in the next couple years.

451

Let's finish this conversa-

with tokenization.

452

It was a popular topic at Exchange.

453

Gonna be honest with you, Roxanne,

I, I, I ne- need some help here.

454

What does tokenization mean?

455

So tokenization at a very high level,

it's putting certain real world assets.

456

So you have anything from, like, real

estate to cash or to shares of a fund onto

457

the blockchain rails, so ownership can

be recorded and transferred digitally.

458

So what that means is it's easier

to move these assets, it's easier

459

to track and record these assets.

460

It can also allow faster settlements,

and it may open up trading 24/7.

461

You know, the first use case that I

had heard of from tokenization is real

462

estate, and I think that's one that's

a little bit easier to understand.

463

So if you tokenize real estate, you

can have, you know, fractional shares

464

issued to, to multiple investors.

465

So if you have a large real

estate, uh, building, multiple

466

investors can technically open

or own a piece of that property.

467

So that's one of the, uh, the more,

I, I guess you say, like, more, um,

468

useful use cases, although it still

hasn't really been accepted into the

469

mainstream quite yet, 'cause there,

there are some legal and operational

470

hurdles that, you know, it has to follow.

471

But, you know, overall at a high level,

I would say- It's not like you're

472

creating a new asset all the time.

473

And I think when people hear tokenization,

they think of cryptocurrencies and

474

they think of, you know, all these

obscure, uh, tokens out there.

475

But it's really just about creating a

new way to trade, um, existing assets.

476

And actually, a lot of the assets that we

see tokenized now are actually not weird

477

cryptocurrencies, but they're actually

some of these, I would call them less

478

interesting but important investments,

like money market funds or treasuries.

479

And that's because, you know, cash

or cash equivalents are typically

480

easier to moder- modernize.

481

You know, they're stable, they're liquid.

482

Um, they have some good

institutional use cases.

483

So there's already some asset managers

out there who offer tokenized funds.

484

So WisdomTree has some.

485

Uh, BlackRock has a tokenized fund.

486

Uh, Franklin Templeton does as well.

487

And then we hear a lot of these

exchanges, like New York Stock

488

Exchange and Nasdaq, are also working

towards, uh, some form of tokenization.

489

Um, and then you, you referred to it

earlier, but, uh, I, I, I moderated a

490

panel at Exchange with FM Investments,

and they talked about filing to tokenize

491

their T-bill ETF, which is ticker TBIL.

492

Uh, so this would be the

first ETF actually that would

493

be tokenized if approved.

494

So you can sort of think of it as

another share class and not, you

495

know, a completely new product.

496

So, you know, this is something,

it's, it's very nascent.

497

Um, you know, people are just

starting to talk about tokenization.

498

We're still very early in the,

uh, the actual phases of it.

499

Yeah.

500

Thank you for that, because Roxanne,

I'm one of them that was like,

501

"Well, does this mean we've got more

bitcoin, different crypto out there?"

502

So thank you, I really

appreciate that explanation.

503

And just real quickly, what does

tokenization mean for financial advisors?

504

I'm assuming it just goes

back to democratization.

505

Yeah.

506

And, you know, honestly, it doesn't

mean a lot for advisors right now.

507

It's, you know, it's,

it's more on the back end.

508

It's more of an infrastructure upgrade.

509

So a lot of these tokenized funds right

now, for instance, they're more geared

510

towards, um, the institutional side.

511

And a lot of those benefits I

mentioned, like faster settlements

512

and improved record keeping, um,

those are more seen on the back end.

513

Um, right now, I think, you know, one of

the biggest, um, advantages is, is more

514

on the digital asset ecosystem side.

515

So when you have, uh, DeFi investors

who aren't traditionally TradFi

516

investors, it could open up ways that

they invest- on, uh, in traditional

517

assets through the blockchain.

518

But I think, you know, if you're an

advisor and, and you're interested

519

in tokenization, you can, you can

access it through, you know, picks and

520

shovels investing, as they call it.

521

There's a lot of, uh, crypto assets that

would potentially benefit from an increase

522

in tokenization, so, Ether, Solana,

XRP, even Chainlink are some of those.

523

Um, those all have, currently

have spot products out.

524

Amplify even has a, uh, a tokenization,

uh, ETF, uh, T- TKNQ, uh, which holds

525

some of these, uh, spot ETFs that I

mentioned, and also holds some of these

526

financial institution equities that are,

uh, involved in the tokenization space.

527

So that's a way that, you know, advisors

or investors are, who are interested

528

in this space can gain access.

529

But right now the, the real advantages

from tokenization are, are very limited.

530

Wow, Roxana.

531

Amazing.

532

Great conversation.

533

Thank you for sharing and dropping

such great insight about the ETF space.

534

I love that you were able to, you know...

535

I don't know how you remember

all the tickers and all the

536

different ETFs, but kudos to you.

537

That's amazing.

538

Great stuff there.

539

Thank you so much, Roxana,

for coming on the show.

540

It's been an honor, really fun.

541

Where can our audience get more

information about TMX VettaFi?

542

Yeah.

543

Thanks, Ryan.

544

It was, it was great being here.

545

So if you want more information

on VettaFi, check out our

546

website at vettafi.com.

547

We have more information on

the services we provide there.

548

And if you wanna read some of our

research insights, you can go to

549

one of our websites, etftrends.com,

550

where we share research

insights and relevant ETF news.

551

We're also pretty active on our

LinkedIn site and on our X site.

552

Our X handle is actually vetta_fi.

553

So check us out on there.

554

Uh, once again, Ryan,

thanks for having me.

555

I loved this conversation.

556

Yeah.

557

Thanks, Roxana.

558

You guys do a lot of great research,

really helping the community

559

understand the ETFs and just all

the different products out there

560

and the trends, so good job.

561

I know it might surprise some, but I do do

some research before these conversations.

562

I go to VettaFi a lot, the website, n-

not even just for this conversation,

563

but just to find out what are some

of the hot trends happening in ETFs

564

and what's going on, so great stuff.

565

And thank you everyone for

listening to this episode of

566

Zephyr's Adjusted for Risk podcast.

567

You can watch all of our other podcasts

on the Zephyr YouTube channel, as well

568

as on Spotify and all the other channels,

platforms that you catch your podcasts on.

569

Thank you very much, and have

a great rest of your week.