Crypto-focused ETFs finally took center stage in 2024, thanks to the arrival of the first spot Bitcoin ETFs after a decade of anticipation. Early adopters have reaped the benefits, with the iShares Bitcoin Trust (IBIT) alone gathering over 53 billion dollars in assets, making it the most successful ETF launch on record. During the (1:15) mark of the ETF Spotlight podcast, Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, explained how the strong regulatory environment and crypto-friendly administration pushed these vehicles into the mainstream. Investors can expect even more innovation in this area as companies race to introduce new crypto-focused products.

Meanwhile, the conversation around cheap beta strategies and actively managed ETFs has intensified. At (12:00) in the podcast, we delved into complex ETF structures and how they have evolved to meet growing demand. From leveraged single-stock ETFs tracking high-volatility stocks like NVIDIA, Tesla, and MicroStrategy to options-based funds promising defined outcomes or enhanced income, the industry has become a hotbed of creativity. This wide array of product offerings gives investors flexibility to diversify their portfolios in ways previously unavailable, sparking constant debate around risk, returns, and suitability.

Global diversification was another crucial topic of discussion at the (18:40) mark. While the U.S. market often dominates headlines, international investments have quietly emerged as competitive contenders for capital inflows. Eric’s analysis suggested that economic and policy shifts abroad could keep global equity and fixed-income ETFs in demand. Determining whether the U.S. or international assets offer the best opportunities in 2025 may come down to each investor’s strategy and risk tolerance.

New frontiers also extend to private asset classes. At (24:20), we explored the possibility of more private investment ETFs appearing this year. As fund providers sense heightened interest from retail investors, they are looking at structures that provide exposure to traditionally illiquid markets. This trend, once limited to large institutions, could potentially allow everyday investors to tap into private equity or real estate in the form of new ETF wrappers. The potential regulatory hurdles and liquidity concerns remain significant, but the allure of diversification and potential returns keeps these ideas firmly in the spotlight.

Looking ahead to 2025 at (27:50), Eric projected global ETF assets could hit 35 trillion dollars by 2035. He also pointed out that the prospective approval of ETF share classes for mutual funds would be a game-changer. Such a move could speed up the decline of more traditional fund structures as ETFs, prized for their lower fees and tax efficiency, continue to assert their dominance. Notably, Eric discussed Vanguard S&P 500 ETF (VOO), Janus Henderson AAA CLO ETF (JAAA), and Range Nuclear Renaissance Index ETF (NUKZ) as names to watch closely for the rest of the year.

By (35:45), the episode concluded with a roundup of key ETFs like IBIT, VOO, JAAA, and NUKZ, underscoring how varied the investment landscape has become. With so many milestones reached in 2024, investors are eager to see if that momentum carries on in 2025. Based on Eric’s analysis, the coming year appears poised for fresh experiments, new products, and possibly even broader acceptance of private assets. Such developments could fortify the ETF’s role as the investment vehicle of choice for millions of people worldwide.

As you keep up with the latest investing news, don’t forget to watch for the next edition of the ETF Spotlight podcast, and subscribe if you haven’t already. If you have any feedback or questions, you can reach us at podcast@zacks.com. It’s shaping up to be an exciting 2025, and those who stay informed will be the first to capitalize on the rapidly evolving ETF market.