Dynamic Investments, A Boon for ETF Developers
The introduction and widespread use of Dynamic Investments will have a massively positive effect for developers of Exchange Traded Funds (ETFs). On this short page I explain how.
Today, ETFs are not mainstream investments. Ask a casual investor what ETFs are and nine times out of ten they won't know. This is a shame as, in my opinion, ETFs are one of the most significant advances to the investing world in 50 years, since the introduction of mutual funds.
ETFs are not realizing their full sales potential today because the standard MPT portfolios that are in use almost universally today do not exploit the unique advantages of ETFs. In addition, financial advisors don't typically recommend them to clients because they don't offer the commissions that are available from mutual funds. In contrast Dynamic Investment Theory (DIT) does exploit ETF advantages to produce higher performing portfolios as you can read about on this site. And Dynamic Investments use ONLY ETFs within their dynamic structure. As a result, Dynamic Investments will be the catalyst that finally takes ETFs "mainstream" and the dominant investment type in the world of investing.
On other pages of this site you can learn how Dynamic Investments (DIs)work. A quick overview of how DIs work is found by clicking here. The purpose of this page is to show how the use of DIs can enable ETF developers to expand their product lines and revenue streams exponentially with minimal time, effort and expense.
How NAOI Dynamic Investments Benefit the ETF Industry
Here are just a few of the ways that the ETF industry will benefit from the introduction of NAOI Dynamic Investments:
- Increased Sales by Meeting Public Demand. When the public learns about the simplicity, high returns and low risk of DIs they will demand them from the financial services industry. And since DIs work only with ETFs, the increased demand for DIs will translate into a significantly increased demand for a full range of ETFs. And, of course, increased demand translates into increased sales for the ETF developer that embraces the Dynamic Investments. Click here to see how the NAOI explains DIs to the public and creates demand for this product type.
- Unleash Hidden Value in an ETF Product Line. The introduction of NAOI Dynamic Investments will exponentially increase the value of a developer's existing ETF product line - virtually overnight. DIT methods exploit the value of ETF combinations. By combining existing ETFs in the Dynamic Investment product structure, new DI products can be created that are far more powerful than any single ETF in the product line. For example, a single Stock ETF or a single Bond ETF may each show an average annual return of about 8% over the last 10 years. These same ETFs, when combined in a Dynamic Investment, would show an average annual return of significantly over 20%+ and with minimal risk! This is value that is not currently being taken advantage of by ETF developers and it is massive. The NAOI can show you how to release this value with minimal time, effort and cost.
- Save Dying ETFs. Many very valuable ETFs are dying today because of low volume. Many are just too volatile to work in today's MPT, buy-and-hold, portfolio structure. But they will work just fine in a Dynamic Investment's buy-and-sell environment. Using DIT methods, a portfolio developer would simply put these ETFs in the Dynamic ETF Pool (DEP) of a Dynamic Investment where they are bought only if they are trending up more strongly than any other ETF in the DEP. And the DI will automatically sell them if their price starts to drop. Thus, the DI structure and management process "tame" the volatility of these ETFs and in essence bring them back to life and saving developers millions of dollars in sunk development costs.
- Expand Product Lines with ETF "Solution" Products. By combining existing ETFs in the Dynamic Investment structure, ETF developers can easily expand their product offerings to include any number DI investing solution products. As you know, DIs are comprehensive products that not only specify the ETFs to use but also how they are to be managed / traded on an ongoing basis. And there are an unlimited number of DI solution products that can be developed without creating a single new ETF! In the future of investing an ETF developer's product line will consist of two categories: a list of ETFs and a list of Dynamic Investment products that combine these ETFs into powerful, solution products.
- Open New Development Opportunities. Selling turnkey investing products in the form of proprietary DI solutions will open a vast new field of opportunity for ETF developers. DIs address the needs of a far larger market than do single ETFs. DIs will certainly be of interest to portfolio advisors, developers and managers. But they can even be sold directly to the public as "off-the-shelf" consumer products. This is a huge development. This is the Holy Grail of the Financial World - the productization of investing! It is discussed in more detail in Chapter 10 of The Dynamic Investment Bible and the NAOI will work with ETF developers to full exploit the benefits of this evolutionary step in investing.
Summary - Defining the Future of Exchange Traded Funds
The world of ETF developers today is running into roadblocks and dead-ends. All major and most minor indexes already have an ETF that tracks them. As a result, new ETF developments are becoming more narrowly focused or are tracking strategies that are far too complex for the average investor to use. These are not the types of ETF that the public wants.
These problems are immediately erased with the advent of Dynamic Investments. DIs are created by combining existing ETFs as opposed to creating new ETFs. And DIs produce higher returns with less risk than any single ETFs, or even any MPT portfolio, in the market today. Add to this the fact that there are an unlimited number of DIs that can be designed and created and it can easily be seen how this new investment type elevates the status of ETFs from just another investment option to the "preferred" investment option.
The bottom line is that with the introduction of NAOI Dynamic Investments, the world of ETFs evolves to a better place. And with this evolution, the ETF industry finally is free to realize its full potential and by doing so become mainstream investments. The NAOI stands ready to show you how.
Contact us to learn how you, as an ETF developer, can enter the future of investing, today!
The New Face of the ETF Market: Summary
The world of investing today is "stuck" in 1952 when Modern Portfolio Theory was introduced to the market and it is still the "settled science" approach to portfolio design today - its not open to question. While markets have changed significantly since 1952, MPT has not and this approach to portfolio design no longer works in modern markets. As a result, investors using MPT portfolios today can neither take full advantage of market positive returns potential nor protect their wealth from market volatility. I have presented on this Web page how the investing world can, and will, evolve to work in modern markets through the use of NAOI Dynamic Investment Theory and the ETF-based Dynamic Investments that this new investing approach creates.
Benefiting most from this evolution will be developers of Exchange Traded Funds and organizations that use ETFs. I have shown on this Web page that in an MPT-based world of investing the advantages of ETFs are not used and the ETF industry is not coming close to realizing its full potential. I have also shown that by embracing an automatic and intelligent buy and sell strategy ETF benefits are fully exploited and ETF developers will be able to exponentially increase sales and market share.
But perhaps most importantly, on this page I have kick-started the evolution of investing that has been stuck in 1952 (when MPT was introduced) for far too long. DIT and DIs are one path forward. There are others. We must continue to work to find them as we strive to make investing more accessible and profitable to the investing public.
Next Steps: To take full advantage of the benefits of Dynamic Investments today contact the NAOI today. We provide a full ranges of services from introductory information seminars to fully customized consulting contracts. Organizations that embrace the change described here will thrive in the future of investing. Those that don't will fade away. That's just how evolution works.