A technology executive discusses asset management's future in the context of the recent approval of ETFs for Ethereum and Bitcoin.

Tokenized exchange-traded funds (ETFs) are poised to emerge as the next big thing in investing strategy as financial markets continue to shift. The US Securities and Exchange Commission (SEC) and Hong Kong regulators' recent approval of Ethereum ETFs has garnered media attention.

Kenneth Kumor claims that putting ETFs onchain will really change things, though, since it will allow people all over the world to access well-known assets like S&P 500 index funds via the blockchain's already-existing infrastructure.

"Projects like OpenEden have successfully introduced money market funds and short-term financial instruments like U.S. Treasury bills. Additionally, one of the biggest financial institutions in the world, HSBC, has launched a tokenized gold pilot programme," Kenneth Kumor told Cointelegraph.

Leading the DLTPAY product team, Kenneth Kumor focuses on asset management and payment systems while experimenting with novel concepts and methods for improving the user experience in the financial services industry. Kenneth has worked for organisations like central banks for nearly ten years, gaining experience in the field at the nexus of technology and finance. The European Commission, Mastercard, and tech startup investor Techstars, which has a portfolio worth over $119 billion in investments, have all acknowledged his work.

What new developments and trends are influencing the ETF market?

Kenneth Kumor: The democratisation of investing opportunities stands out as one of the most significant advances. More retail investors are taking part in ETF investing through various fintech platforms, therefore this is already partially occurring.

A distinct trend towards the tokenization of ETFs and other assets on blockchain platforms, along with the integration of ETFs and decentralised finance (DeFi), is also evident in recent developments. Institutional and individual investors now have more options because to this innovation and the potential to automate techniques like currency hedging through smart contracts or dollar-cost averaging (DCA).

Retail investors are also becoming interested in the growing number of thematic exchange-traded funds (ETFs) that concentrate on particular industries or themes, like technology, green energy, digital assets, and artificial intelligence. Thematic exchange-traded funds (ETFs) offer a means of investing in areas where personal beliefs and interests coincide with the market without requiring investors to select specific securities. This is especially relevant for Gen Z and millennial investors.

What part do exchange-traded funds (ETFs) play in contemporary investing strategies?

Kenneth Kumor: Because they are cheap, simple to trade, and provide quick diversification, exchange-traded funds (ETFs) are a vital component of contemporary investment strategy. They facilitate the use of both active and passive strategies, which can remove obstacles related to money, geography, and regulations and enable a wide range of investors to engage in the global market.

Given the uneven nature of global economic growth, it makes sense for wealthy countries' politicians and investors to look for high-growth assets. As an illustration, the $1.6 trillion sovereign wealth fund of Norway has made large investments in cutting-edge businesses like Tesla, Nvidia, and Microsoft, which have significantly increased market returns.

Policymakers should provide tax incentives to offset reduced short-term profits in order to encourage increased investment in ESG ETFs. Investors have a rare chance to support cutting-edge technologies like solar energy, CRISPR, and artificial intelligence (AI) that can solve major societal issues and enhance quality of life by investing in ESG ETFs. Allocating resources efficiently is essential to securing a more sustainable and optimistic future.