WHAT MAKES AN ETF SUCCESSFUL?

EXCHANGE-traded funds have exploded in popularity, with the industry now reaching the milestone of $10 trillion in assets.

Aniket Ullal, head of ETF research and analytics at CFRA Research, recently examined the ETFs launched over the 10-year period ending June 30, 2024, to identify trends among the successes. Ullal did not look at the funds' returns, so "success" here is defined in terms of gathering enough assets to survive and, for many, thrive which is, after all, ultimately what determines the selection available to investors. He found that of the 3,426 ETFs launched (not including mutual fund conversions), only 38% were viable, meaning they remained listed and exceeded $100 million in peak assets. Some 10% of the listings crossed the $1 billion mark in assets at some point over the decade. Among his other observations:

Pioneers are rewarded. Among the most successful launches of the decade (again, in terms of assets) were iShares Bitcoin Trust (symbol IBIT) and JPMorgan Equity Premium Income ETF (JEPI).