Toroso’s ETF Industry Index

Toroso ETF Industry Index (“TETF.Index”)

The Index Explained   |  The ETF Industry  |  Index Construction    |    Characteristics    |      FAQs     |    Index Committee



Source: Morningstar Direct, as of 3/31/2018


The Toroso ETF Industry Index measures and monitors the performance of publicly traded companies that derive revenue from the Exchange Traded Funds ecosystem. Constituents range from fund sponsors, to index & data companies, trading & custody platforms, liquidity providers, and exchanges. 

Why measure the ETF Industry growth? Thanks to their key attributes—transparency, tax efficiency, low management fees, intraday tradability, and ability to provide easy access to asset classes and strategies previously out-of-reach for everyday investors—ETFs have seen steadily growing interest from individual investors, financial advisors, and institutional investors in recent years.

Long Term Growth Prospects. Over the last decade, AUM in the ETF space grew at an annualized 19.4%, and in 2016, the U.S. ETF industry recorded record inflows totaling $293 billion—the highest ever.

Targeted Access. ETF sponsors are not the only entities to benefit from expansion throughout the space. Toroso’s ETF Industry Index measures the growth of the entire ETF value chain—the intricate ecosystem of financial innovators and service providers that profit from the success and benefits of ETFs.

“ETF Asset Growth, in $500 billion steps”


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Source: ETFGI



ETF Ecosystem


US ETF vs Mutual Fund Net Flows

mutual fund and etf Graf

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Source: Morningstar Direct

ETF Evolution


Source: Morningstar Direct


The Toroso ETF Industry Index measures and monitors the performance of an investable universe of publicly-traded companies deriving revenues from the ETF (“exchange traded fund”) industry. The Index was created and is owned by Toroso Investments, LLC. The index is maintained by Solactive AG (the “Index Administrator”).

Index Construction

The Toroso ETF Industry Index is comprised of public securities of issuers that meet the specific and objective criteria listed below.

All participants are equal weighted with in the tiers and are subject to a 9% maximum weight for any one security with in a tier.

The tier system, as described below, is designed to overweight companies with the most exposure to the growth of the ETF industry:

TIER A – 50%
Substantial participation in the ETF industry with direct financial impact to shareholders

This equally-weighted tier is designed to capture companies with the purest connection to the growth of the ETF industry. It should include dominant companies like BlackRock, which oversees close to 40% of all US ETF assets, as well as influential pure ETF players, such as WisdomTree Investments. Tier A will focus on ETF issuers but can include companies from other categories that have substantial revenue from the ETF industry or are an integral part of the ETF ecosystem. An example of a current non-issuer Tier A component is Chicago Board Options Exchange, Incorporated (CBOE). With the acquisition of BATS and ETF.COM, as well as their dominance in the trading and indexation of volatility, the committee determined that CBOE is an integral part of the ETF ecosystem and has substantial revenue from the industry.

Download Tier A Fact Sheet 

TIER B – 25%
Substantial participation in the ETF industry with indirect financial impact to shareholders

This equally-weighted tier is dedicated to companies that have had a meaningful impact on the industry but the revenues derived to the company may either be indirect or muted by other business activities.  KCG holdings is an example of a company that is integral to the ETF ecosystem as a key lead market maker and liquidity provider, but their revenues can deviate from the growth of ETFs as their primary business is execution and transaction oriented for all securities, not just ETFs.  JP Morgan is an example of the “muted” but meaningful tier B selection.  JP Morgan is an issuer with substantial ETF assets but many other business activities overshadow this revenue for the firm.  In addition to their issuer status, JP Morgan is involved with ETF trading, ETNs (JPMorgan Alerian MLP Index ETN, ticker AMJ, currently the largest ETN), ETF custody & trust service and minority investment in a private ETF issuer.  Despite the indirect effect on the revenue and share price of JP Morgan, the firm has a substantial impact on the ETF industry.

Download Tier B Fact Sheet

TIER C – 15%
Moderate participation in the ETF industry with indirect financial impact to shareholders

This equally-weighted tier is designed to capture exposure to companies that support or have moderate participation in the ETF industry.  Examples of support companies that support the industry are custodians and fund service companies like US Bancorp or Bank of New York.  Virtus, Northern Trust and Ameriprise are examples of companies that do issue/sponsor ETFs but their current impact and market share of the ETF industry is moderate. Additionally, the revenue and relevance to shareholders of these companies is indirect.

Download Tier C Fact Sheet 

TIER D – 10%
New or minor participation in the ETF industry with indirect financial impact to shareholders

The key purpose of this equally-weighted tier is to gain exposure to ETF industry new-comers and minor participants.  Eaton Vance Corporation is a great example of new-comer that is also an innovator with their NextShares structure, but the revenue and ETF asset market share are relatively minor.  This tier can also capture service, data, exchange, and trading companies that have ETF oriented revenue but have yet to make ETFs a business priority.

Download Tier D Fact Sheet 

Ameriprise Financial Inc AMP
Bank of New York Mellon BK
BlackRock Inc BLK
CBOE Holding Inc CBOE
Charles Schwab Corp SCHW
Citigroup Inc C
CME Group Inc Class A CME
Cohen & Steers Inc CNS
DST Systems Inc DST
E*TRADE Financial Corp ETFC
Eaton Vance Corp EV
FactSet Research Systems Inc FDS
Franklin Resources Inc BEN
Goldman Sachs Group inc GS
Hancock Holding Co HBHC
Intercontinental Exchange ICE
Invesco Ltd IVZ
Janus Capital Group Inc JNS
JPMorgan Chase & Co JPM
KCG Holdings Inc A KCG
Legg Mason Inc LM
MarketAxess Holdings Inc MKTK
Morgan Stanley MS
Nasdac Inc NDAQ
Northern Trust Corp NTRS
Pincipal Financial Group Inc PFG
S&P Global Inc SPGI
SEI Investments Co SEIC
State Street Corp STT
TD Ameritrade Holding Corp AMTD
UMB Financial Corp UMBF
US Bancorp USB
Virtus Investment Partners VRTS
Wisdom Tree Investments Inc WETF


Market Cap Breakdown

30 companies 75.80% of portfolio.
MID CAP $2-10 B
9 companies 11.80% of portfolio.
5 companies 12.29% of portfolio.
Index Holdings overlap Overlap Active Share
S&P 500 Index 21 5.6% 94.4%
DJ Financial Services Index 21 23.2% 76.8%
Index Overlap Holding ComparisonHoldings in Toroso ETF Industry Index also in Common IndexHoldings in BM also in TETF
S&P 500 Index 67.3% 5.8%
DJ Financial Services Index 67.3% 39.2%


Market Cap Breakdown

Sponsor 48.20%
Exchange 17.20%
Index/Data 15.20%
Service 10.60%
Liquidity 8.7%


The primary criteria for selecting a company for inclusion in the index is that the company derives revenue from operations directly from or related to the ETF Industry. Constituents are from but not limited to ETF issuers, asset managers with ETF products, index providers, exchanges, ETF service providers and other companies involved in the ETF Industry (platforms, traders, etc.).  In addition:

Eligible companies must have a free-float adjusted market capitalization of USD $200 million or greater for initial inclusion in the index. A free-float adjusted USD $200 Million minimum is required for ongoing index inclusion. To ensure adequate liquidity, constituents must have three (3) month average daily turnover of at USD $1 million.

The Index weighting is based on a tiered system that primarily looks at revenue produced by participation in the ETF Industry. The Index Committee has sole discretion in determining the tier ranking of each company based on intangible factors which may connect that constituent to the growth of the ETF industry. All participants are equal weighted with in the tiers and are subject to a 9% maximum weight for any one security with in a tier.

The Index reconstitution is the responsibility of the Index Administrator (Solactive AG) and is performed semi-annually in June and December based on data as of the last business day in May and November respectively.

New companies that meet the eligibility requirements will be added to the index at the time of the semi-annual rebalancing.



Over 15 years of experience in financial services and management responsibilities, focused on growth initiatives, product launches, and sales management. He also has direct experience with startup companies and corporate build outs. Responsible for Toroso’s key initiatives and strategic relationships.

Guillermo is CEO of Toroso Investments and Tidal Growth Consultants. Prior to Toroso, Guillermo led the sales and business development efforts at Global X Funds helping the company reach approximately US$4 billion in AUM. Previously, he was the founder and managing partner of two venture capital firms (MC Capital and GT Capital) dedicated to the incubation and growth of start-ups in the US and Latam. Prior to that, he was founder and CEO of a pioneer food distributor in the US. Guillermo began his career in the area of ​​M&A investment banking with Bankers Trust & Deutsche Bank. He has a degree in Business Administration from CUNEF (top finance college in Spain) and holds an MBA from the Kellogg School of Management (Northwestern University) in Chicago.


15 years experience in the asset management business.Prior experience included head of investments at Global X Management (a provider of ETFs), and business development, investment strategy, and strategic initiatives at Horizon Kinetics. Responsible for all investment management, research, and trading.

Michael J. Venuto is an ETF industry veteran with over a decade of experience in the design and implementation of ETF-based investment strategies. Most recently, he is behind the launch of the Toroso ETF Industry Index, which measures and monitors the performance of publicly traded companies that derive revenue from the Exchange Traded Funds ecosystem.  The Toroso ETF Industry Exposure & Financial Services ETF (TETF) tracks this index.

Michael is Managing Director of Tidal Growth Consultants as well as Co-Founder and Chief Investment Officer of Toroso Investments, LLC.   Previously, he was Head of Investments at Global X Funds where he provided portfolio optimization services to institutional clients. Before that, he was Senior Vice President at Horizon Kinetics where his responsibilities included new business development, investment strategy, client and strategic initiatives.

Michael was instrumental in the establishment of multiple strategic investments and partnerships related to ETFs, Exchanges and Indexation.  In 2014, Michael was chosen as one the ETF.COM All Stars for his research and is often quoted as an ETF expert in publications such as Reuters and Barron’s. Michael Venuto studied Philosophy and Religion at NC State University and is an avid Chess player.


Burton Gordon Malkiel is an American economist and writer, most famous for his classic finance book A Random Walk Down Wall Street (now in its 12th edition, 2015). He is a leading proponent of the efficient-market hypothesis, which contends that prices of publicly traded assets reflect all publicly available information, although he has also pointed out that some markets are evidently inefficient, exhibiting signs of non-random walk.

Malkiel in general supports buying and holding index funds as the most effective portfolio-management strategy, but does think it is viable to actively manage “around the edges” of such a portfolio, as financial markets are not totally efficient.

Malkiel is the Chemical Bank chairman’s professor of economics at Princenton University, and is a two-time chairman of the economics department there. He served as a member of the Council of Economic Adviser (1975–1977), president of the American Finance Association (1978), and dean of the Yale Scholl of Management (1981–1988). He also spent 28 years as a director of The Vanguard Group. He currently serves as Chief Investment Officer to software-based financial advisor, Wealthfront Inc and as a member of the Investment Advisory Board for Rebalance IRA.
In 1949, Malkiel graduated from Boston Latin School, and went on to receive his bachelor’s degree (1953) and his MBA (1955) from Harvard University. He originally went into the business world, but had always had an interest in academic economics and eventually earned his doctorate (1964) from Princeton University.


Kevin T. Carter is the Founder of The Emerging Markets Internet ETF (NYSE: EMQQ). Mr. Carter is also the Founder of Big Tree Capital an investment manager focused on Emerging & Frontier Markets.

Kevin T. Carter is the Founder of The Emerging Markets Internet ETF (NYSE: EMQQ). Mr. Carter is also the Founder of Big Tree Capital an investment manager focused on Emerging & Frontier Markets. Mr. Carter was the Founder & CEO of AlphaShares, an investment firm that offers five Emerging Markets ETFs in partnership with Guggenheim Investments. Previously Mr. Carter was the Founder & CEO of Active Index Advisors acquired by Natixis in 2005 and the Founder & CEO of eInvesting acquired by ETRADE in 2000. Mr. Carter received a degree in Economics from the University of Arizona in 1991 and began his career in 1992 with Robertson Stephens & Company.


Linda H Zhang, Ph.D, is the founder of Purview Investments, a firm specializing in active ETF research and ETF managed solutions.  She has devoted her career to asset management, with extensive expertise in building ETF managed solution business, ETF research and execution, macro investment research and portfolio management.

She was most recently the Head of Investment Research and Senior PM at Windhaven Investment, a lead ETF managed solution firm. She joined the ETF ecosystem from an institutional asset manager MFS, as PM of Global Multi-Asset, Absolute Return and Commodities mutual funds. Previously, she was a lead PM at BlackRock’s Multi-Asset Solution Group, and served on the asset allocation committee. Her PM tenure started at State Street Research in 2003, where she was the Head of Quant Strategy Group and the lead manager for the firm’s flagship Global Allocation Fund. Dr. Zhang started her career as a quantitative analyst at Baring Asset Management, modeling security, sector, country, factor and investment style selection, conducting quantitative research in fixed income, risk modeling and performance analytics.

Dr. Zhang is a co-founder of Women in ETFs. She is a recipient of the Top Women in Asset Management Awards 2015 by Money Management Executive. She has spoken extensively about global investment and ETF topics in industry conferences, business media. She has published in Journal of Investing, CFA Digest, Journal of Alternative Investments and She is a member of The Economic Club of New York and Boston Committee on Foreign Relations. Dr. Zhang got her B.A. in Business from University of Regina, Canada, a Master’s degree in Applied Economics and a Ph.D in Finance from University of Massachusetts at Amherst. She lives with her family in Manhattan, New York.


Mr. Monaco served as Head of ISE ETF Ventures at the International Securities Exchange and has a proven track record of bringing new products from concept to commercial launch in his 14 years at ISE.  He oversaw all ETP financing activity and ETP-related investments, derivative product development, product partnerships, index development, and index licensing.  Mr. Monaco was also responsible for negotiating, structuring, and syndicating all ETP deals.

Mr. Monaco has conceived or designed dozens of indexes and has managed the development of many more, most of which have been the basis for ETFs, ETNs, UITs, mutual funds, or cash-settled derivatives. He has been involved in the formation, launch, marketing, and distribution of many investment products, and is deeply familiar with product structure, contractual agreements, regulatory requirements, exchange rules, and market microstructure.

Mr. Monaco graduated from Baruch’s Nash Program with an MBA, and from The Cooper Union with a Master of Engineering degree and a Bachelor of Engineering degree.