In a recent episode of “Behind the Ticker,” Mike Venuto, co-founder and CIO of Tidal Financial Group, shared insights into the company’s approach to launching, growing, and operating ETFs. Tidal, a firm that has grown significantly over the years, now manages and supports over 160 funds with more than $19 billion in assets under management. Venuto, who has a background in ETFs dating back to his time at WisdomTree and Global X, highlighted Tidal’s unique platform that helps clients from initial idea generation to full-scale ETF operations.
About Mike Venuto and Tidal: The ETF Masters
Venuto discussed his hands-on role at Tidal, which involves structuring ETFs, managing active funds, and collaborating closely with clients to develop innovative products. A key focus of the conversation was on the breadth of Tidal’s capabilities, from handling compliance and legal matters to marketing and product development. The company prides itself on offering a comprehensive service, allowing ETF issuers to focus on managing their portfolios while Tidal handles the operational complexities.
Investment Strategy and Approach
One of Tidal’s standout achievements is its ability to launch ETFs quickly and affordably, compared to the traditional process. Venuto explained that while starting an ETF independently can cost hundreds of thousands of dollars and take up to nine months, Tidal can often bring funds to market in under four months at a fraction of the cost. This efficient process, combined with the firm’s expertise in complex strategies such as options, derivatives, and leverage, has allowed Tidal to grow rapidly, especially in the active ETF space, which has seen significant demand.
Venuto also touched on trends in the ETF market, including the growing interest in active strategies, single stock ETFs, and the potential for mutual fund-to-ETF conversions. He noted that while mutual fund conversions have been slow, the demand for more tax-efficient ETF structures continues to rise. Additionally, Venuto emphasized that Tidal only partners with clients who have strong, viable product ideas, ensuring that the firm maintains a low fund closure rate and helps clients succeed in a competitive market.
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Mike Venuto covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
And I can say this, the SEC can come back me on the head if they want to. But I can guarantee that if you're a taxable investor and you're choosing between the same strategy and a mutual fund versus an ETF, 99% or 94% of the time you're going to be way more tax efficient in the ETF.
Our Sharia portfolio is when we met them, they had $80 million. They now have four ETFs with us and then they have mutual funds as well and like $750 million. And so, cook bonds and reach, like four, it's just under four years.
Market Context and Positioning
Nancy and crews are very different. We're not meeting with management. We're not making a call on the business. What we're doing is we have a research agreement with unusual whales. And the partner in that is a company called subversive who set up everything originally and then they brought us into actively manage it. When they were managing it in the previous iteration, it was extremely, extremely diversified. One fund had Nancy had 700 stocks, plus and crews was like 400 plus.
There's micro baskets at the Greg Rex has done some stuff there. So I think there's going to be a lot of giving people trading vehicles that are associated with things that they're excited about. I do think that my friend Wes at alpha architect hit on something interesting what box right like it does seem like there's this appetite for even more tax advantage strategies than just traditional ETFs. Haven't seen anybody else do anything quite like it yet. I'm sure there'll be iterations but I do think there's some opportunities there that could be a huge mega trend because it certainly seems like taxes are going up.
If you come to us, most ETFs we can launch for under 70,000 and do it in less than four months. Unless it's complicated at which point we're going to walk you through all those complications and get you there. Number two, everything that's coming to market and succeeding right now, all the launches this year that are working are active. And not only are they active, they're complex. And complex means, like we said, Jerry Parker or Yield Max or Corey Hofstein with return stack, they're using things like options derivatives leverage.
If you're assets are at Morgan Stanley or UBS you they're going to get upset and you're going to argue and then you're going to restart know that my suggestion them is always let's start the founders ETF or the your flagship ETF right and you make it a concentrated portfolio of your top picks and then you buy the ETF and your mutual fund so you. You know your large cap fund might buy 10% in the ETF and your mid cap might only buy five but some of those ideas are in every one of your strategies.
Notable Insights
"Yeah, I mean, it's a tagline, obviously, but the whole point of it was the experience, right?"
"And I think that's why we've seen the explosion that we've seen."
Key Takeaways
- Venuto, who has a background in ETFs dating back to his time at WisdomTree and Global X, highlighted Tidal’s unique platform that helps clients from initial idea generation to full-scale ETF operations.
- A key focus of the conversation was on the breadth of Tidal’s capabilities, from handling compliance and legal matters to marketing and product development.
- The conversation explores important themes in fixed income relevant to today's advisor landscape.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Mike Venuto highlights important considerations around etf structure. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of etf structure and crypto & digital assets discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Mike Venuto, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.