Garrett Stevens & Rich Malinowski

Garrett Stevens and Rich Malinowski are from Exchange Traded Concepts (ETC), the very first white label ETF issuer in the world. ETC handles everything someone might need to launch an ETF: legal and regulatory work, custom websites, portfolio management, regulatory filings, marketing services, and distribution support. They also serve as sub-advisor for quite a few ETFs. This episode was recorded live at the Ultimate Client Summit in Dallas, and the conversation covers ETF industry trends, what makes a successful launch, and where things are heading in 2025.

The White Label Model and What's Changed

Garrett explains that ETC offers a full turnkey platform, but they're flexible enough to provide services individually too. A manager might only need portfolio management support, or just regulatory filings, or marketing help. The model has evolved significantly since ETC pioneered it. The industry has grown from a handful of white label providers to a competitive market, which has pushed everyone to improve services and reduce costs for clients.

Rich adds that one of the biggest shifts they've seen is from passive to active ETFs. Early white label clients were typically launching index-based products. Now, the majority of new launches are active strategies. This changes operational requirements significantly. Active ETFs need more portfolio management support, more frequent trading, and different compliance monitoring. With active products, you're selling a management style as part of the product, not just what you're investing in but how you're doing it. Rich notes that the growth of active has been the dominant trend in the ETF industry over the last few years and shows no signs of slowing.

What Makes a Successful ETF Launch

Both Garrett and Rich emphasize that having a great strategy is necessary but not sufficient. The number one factor in a successful launch is distribution. You need a plan for how you're going to reach investors before you file the paperwork. Too many managers come in with a brilliant strategy and no distribution plan, and those launches struggle regardless of performance.

They highlight three types of clients driving growth at ETC. First, individual managers with track records who want their strategy in an ETF wrapper, the classic white label client. Second, existing ETF issuers building out product suites. Rich points to SP Funds as a standout: they came to ETC with $80 million and one Sharia-compliant fund, and have since grown to four ETFs plus mutual funds totaling around $750 million in under four years. They kept building components so investors could construct complete Sharia-compliant portfolios. Third, conversions: managers moving strategies from SMAs, limited partnerships, or mutual funds into the ETF structure for tax efficiency and distribution advantages.

Rich makes a practical point about the tax angle: advisors can take their taxable client money and put it in ETFs while leaving non-taxable accounts in separate accounts. This gives advisors another tool when talking to clients about tax-efficient portfolio construction. He notes that across ETC's product suite, they haven't paid any substantial capital gains distributions in the last year or two, which is a powerful selling point.

Industry Trends: What's Coming Next

Brad asked what the next wave of ETF innovation looks like. Garrett noted that single stock products aren't done yet. Beyond leveraged and inverse single stock ETFs, there are at least 20 more things that can be done with individual names. There are also concentrated micro-baskets targeting specific themes with a handful of names, like RoundHill's Magnificent Seven ETF.

ETC already has a full suite of AI-driven products through Craft, a South Korean technology company that handles all security selection through artificial intelligence. These products have been running for several years, predating the current AI hype cycle. Garrett and Rich noted that while AI-related product demand is exploding, the managers who succeed will be those with genuine quantitative capabilities and real track records, not just a ChatGPT wrapper on a stock screen.

Key Takeaways

• Exchange Traded Concepts was the first white label ETF issuer in the world, offering full turnkey services as well as individual components like portfolio management, legal, and marketing.
• The biggest industry shift is from passive to active ETFs. Active strategies now make up the majority of new launches and require significantly more operational support.
• SP Funds grew from $80M and one product to $750M across four ETFs and mutual funds in under four years by building a complete Sharia-compliant suite through ETC.
• Distribution is the number one factor in success. A great strategy without a plan to reach investors will struggle regardless of performance.
• ETC already runs AI-driven products through Craft (years of track record), and expects more single stock innovation, micro-baskets, and mutual fund to ETF conversions in the next wave.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.