Early Assessment of 2024 ETF Predictions

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On this week’s episode of ETF Prime, host Nate Geraci invited VettaFi’s, Head of Research, Todd Rosenbluth to the show to discuss his 2024 ETF Predictions and more.

Assessing Geraci’s 2024 ETF Predictions

On this week’s podcast, Geraci brought on VettaFi’s Todd Rosenbluth to discuss Geraci’s 2024 ETF Predictions and assess how they are doing thus far. The first prediction that the duo jumped into was Geraci’s prediction that BlackRock would gain market share over Vanguard. Geraci shared that in 2024 thus far Vanguard has taken in about $50 billion in assets. While BlackRock has only taken in about $21 billion during the same time frame.

However, iShares has two of the top three ETFs in terms of inflows this year with the iShares Core S&P 500 ETF (IVV) and iShares Bitcoin Trust Registered (IBIT). Geraci mentioned that despite these funds’ influx of money iShares also has several other funds with significant outflows this year. He then asked Rosenbluth for his take on why this prediction hasn’t gone well thus far.

“Vanguard has only one ETF in the first two months that had more than a billion dollars’ of net outflows,” Rosenbluth said.

Where Has Vanguard Seen Inflows?

Rosenbluth then reiterated Geraci’s earlier point that BlackRock has had several other funds suffering from significant outflows while Vanguard has not. He also highlighted that a large amount of Vanguard’s inflows have gone to broad-based funds which caught his attention. Rosenbluth then named the Vanguard S&P 500 ETF (VOO) as a Vanguard fund within the U.S. that has accumulated significant assets. He also mentioned Vanguard funds tracking outside the U.S. like the Vanguard Total International Stock ETF (VXUS) and Vanguard FTSE Developed Markets ETF (VEA) as funds that have contributed to the firm’s $50 billion in inflows.

Rosenbluth feels that BlackRock is having a solid start to the year overall, but he believes that Vanguard has just come out of the gates much stronger. That said, Rosenbluth shared that it is possible at some point later in the year for BlackRock to pick up some steam on Vanguard if fixed income ETFs come into investors’ focus.

In addition, the duo continued to explore this prediction and dive deeply into the rest of Geraci’s five ETF predictions for 2024.

Capital Group a Top-10 Asset Gatherer in 2024

The conversation then shifted gears away from Geraci’s 2024 predictions to the duo’s current predictions for the remainder of 2024.

Rosenbluth shared that he believes that “Capital Group is going to be a top 10 net inflow gatherer in 2024.”

He said that this prediction is based on data that VettaFi obtained that showed Capital Group as the 21st largest firm. Rosenbluth mentioned that the firm currently has $22 billion in total assets and has only had products in the marketplace for two years. He believes that as these products make their way to their third anniversary they will gain more assets.

Rosenbluth also shared that the firm has collected $2.6 billion thus far in 2024 within its active core equity and fixed income ETFs. Geraci then joined that conversation to share that he agrees with Rosenbluth’s take and that he could really feel Capital Group’s presence at the Exchange Conference in February.

RSP Will Outperform Its Peers

The duo then discussed one of Geraci’s newest predictions for 2024 surrounding the release and debut of spot Ethereum ETFs. Following a brief discussion on that prediction, the pair then moved on to another one of Rosenbluth’s predictions.

“The equal-weight version of the S&P 500, which is RSP from Invesco is going to outperform the market-cap weighted versions of the S&P 500,” Rosenbluth said.

He mentioned that he believes that the Invesco S&P 500® Equal Weight ETF (RSP) will outperform many of its peers including SPDR S&P 500 ETF Trust (SPY), and the iShares Core S&P 500 ETF (IVV). Rosenbluth then shared that at a high level, he feels that dispersion is likely to widen soon. He also said that in February, equal weight narrowed its gap in terms of performance when compared to cap-weighted ETFs. Ultimately, Rosenbluth believes that there is going to be a shifting market if the Fed begins to cut rates later this year, and if that happens RSP and its equally weight stocks could outperform. Additionally, the duo discussed Geraci’s final prediction for the rest of the year.