PT - JOURNAL ARTICLE AU - Andrew S. Clarke AU - Michael W. Nolan AU - Tyrone Sampson TI - The Future of ETFs: <em>A Backward Glance</em> AID - 10.3905/jii.2020.1.087 DP - 2020 Apr 18 TA - The Journal of Index Investing PG - jii.2020.1.087 4099 - https://pm-research.com/content/early/2020/04/18/jii.2020.1.087.short 4100 - https://pm-research.com/content/early/2020/04/18/jii.2020.1.087.full AB - The next wave of ETF innovation will expand the investment opportunity set, reduce investment costs, and nudge the efficient frontier northwest. We can see this future in the rearview mirror. It is the history of the fund industry. We review a framework for evaluating investment innovation and assessing its contribution to “investor welfare,” a measure of investors’ ability to build portfolios that reflect their preferences. We also discuss opportunities for innovation and the technological and regulatory developments that could bring them to the marketplace.TOPICS: Exchange-traded funds and applications, mutual funds/passive investing/indexing, mutual fund performanceKey Findings• The mutual and exchange traded fund industry’s history is its roadmap to the future.• As in the past, the industry will use advances in investment theory and new technologies to nudge the efficient frontier northwest, improving risk-adjusted returns.• These innovations will give investors the ability to build portfolios that more accurately ref lect their preferences, enhancing “investor welfare.”