Inside ETFs Conference: The Good and The Bad (part 2)

The world’s largest ETF Conference, Inside ETFs, was a successful event boasting close to 2,000 attendees. The new venue for the conference, the Westin Diplomat Resort and Spa in Hollywood, Florida was befitting this dynamic conference and industry. The Diplomat’s glass walls and view of the Atlantic Ocean exemplified the transparency and growth potential of ETFs. I trust this venue will be revisited next year.

The Exhibition Hall was full of ETF Sponsors and other vendors. It was a great chance to dialogue with firms as well as capture updated product and research literature. Here’s my take on the Good and the Bad from the Exhibition Hall.

First, ETF Securities stood out in terms of their extremely focused product suite. They have built a unique physical backed metals franchise and appear to be headed for more growth. They could be a great strategic acquisition for a broad based Sponsor with little to no metals or commodity exposure. First Trust Portfolios, who has been screaming upward in AUM over the last year, must have had the largest group of people in attendance from a Sponsor. In fact one of their top distribution talents — actually I believe one of the top talents in the industry — was at the conference for the first time in my recollection. These observations suggest a greater resource focus for this product line at FTP that will likely propel it further up the Sponsor hierarchy. Rydex displayed some solid new branding associated with the expansion of their equal weighted ETFs. They are definitely in growth mode and apparently are actively looking to add sales people. Global X, the Justin Bieber of ETFs (meaning a young sponsor with blockbuster success), had a ton of traffic at its both. Perhaps it was the iPod speaker giveaway but it is more likely due to their continued innovation. Guggenheim Funds sported a minimalist booth design which definitely stood out. They made some waves at the conference as news broke on several new promising ETF filings that were made public. Direxion had one of the most engaging groups of people at a booth, which set them apart. These firms all stood out in a good way to me.

There were a surprising amount of Sponsor booths that were left empty — meaning no Sponsor staff in sight. Oddly enough, it seemed the larger ETF Sponsors — with the exception of iShares which had a fantastic booth that was more like a fully staffed lounge — were more likely to be guilty of abandonment. It feels as though the sense of urgency just isn’t there anymore at some of the larger shops…I made the rounds at least four times in two days and several booths never had a single representative present! (No, I decided I’m not going to name specific Sponsors as this is likely to have unintended consequences.)
Unfortunately for the ETF industry, some booths bordered on pathetic due to lack of professionalism. A variety of sub $500 million ETF providers were offenders here. Here’s a word of advice to smaller ETF Sponsors, please spend some money on professional branding and keep the booth literature organized. If you can’t accomplish those two things, save the money you were going to spend on the conference and use it for branding and booth organization efforts. Upon completion be sure to return to the conference when your booth will actually have a positive benefit to your business. In addition to branding and organization issues, a few Sponsors — some using third party distribution — had so called sales people watch me walk up, scan the literature, grab a few pieces and never acknowledge me. To my amazement, one booth featured three people slouched on chairs watching me do this. Are you kidding me? All firms invested significant capital to be at this conference and to ignore booth traffic is a shame and worse than abandoning the booth. Perhaps I had several unique experiences but I doubt it.

So there’s my quick take on the Good and the Bad at this year’s Inside ETFs conference. I’m sure next year will have plenty more to talk about…