How equities, fixed income, crypto and commodities are coming together in the ETF space
Speakers
Summary
- The ETF industry is evolving beyond passive index tracking, with active strategies now comprising 40% of net inflows into ETFs, up from 25-30% previously.
- Income-oriented ETFs, including buffered and derivative income products, are driving innovation due to strong demand for yield in equity and equity-like securities.
- Crypto is establishing itself as a fifth asset class after equities, fixed income, real estate, and commodities, with indexing via ETFs seen as a key way for advisors to gain exposure.
- Fixed income active ETFs are incorporating multi-asset strategies and options overlays to provide additional income, with increasing focus on payment frequency (e.g., monthly, weekly).
- Commodities and related sectors (materials, utilities, energy) are significantly underallocated, representing less than 10% of the S&P 500, but offer diversification with volatility similar to equities over 25 years.
- Secular trends like AI, electrification, and data center buildout are driving demand for base metals (e.g., copper) and energy, supporting long-term commodity exposure.
- ETF share classes are being developed for retirement channels (e.g., 401ks) to incorporate passive strategies more tactically, addressing a gap in the retirement arena.
- Private markets, including private credit and ABS, are being incorporated into liquid ETF wrappers, expanding product capabilities.
- Staking products in crypto ETFs provide yield opportunities, enhancing appeal for income-focused investors.
- Blockchain technology could enable more frequent or real-time distributions in the future, aligning with investor preferences for regular income.
Trade Ideas
Bill states that crypto has established itself as the fifth asset class after equities, fixed income, real estate, and commodities, and deserves an allocation. Indexing via ETFs allows advisors to get exposure while managing the Darwinian battle of tokens. As crypto gains legitimacy as an asset class, demand for compliant, simple access through ETF wrappers will grow, with indexing providing a low-friction entry point for mass adoption. LONG because crypto is becoming integral to portfolio construction, and ETF structures solve key access problems like custody and cash management, broadening investor demand. Regulatory crackdowns, technology failures, or a collapse in investor confidence could halt adoption and flows.
Paul notes that materials, utilities, and energy sectors represent less than 10% of the S&P 500, indicating underallocation. Commodities as a basket have volatility similar to equities over 25 years, and secular trends like AI and electrification are driving demand for base metals and energy. Due to current underallocation and increasing demand from technological and infrastructural trends, commodities and related sectors are poised for growth and provide essential portfolio diversification against market concentration risks. LONG because commodities offer insulation from equity market risks and benefit from sustained demand for resources critical to electrification and data center expansion. A global economic downturn reducing commodity demand, or technological advancements that substitute away from key materials like copper.
Up Next
This CNBC video, published March 17, 2026, features Bill Baruch, Paul Sankey discussing BTC, DBC. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Bill Baruch, Paul Sankey · Tickers: BTC, DBC