Welcome to ETF IQ, a weekly newsletter dedicated to the $14 trillion global ETF industry. I'm Bloomberg News reporter and anchor Katie Greifeld.

Equities in Dallas

The Texas Stock Exchange’s big ambitions in the $11 trillion ETF world got a little closer to reality this week.

The upstart announced on Thursday that Cboe’s former head of exchange-traded products listings Robert Marrocco will join as its global head of ETP listings, while Nasdaq’s former head of ETP listings Alison Hennessy will join as TXSE’s managing director of ETPs. Two other Cboe alums, Kyle Murray and Laura Morrison, are also signing on. 

The hires are a bold statement of intent by the Texas Stock Exchange and, as industry veteran Dave Nadig put it, add “instantaneous authority.” Three big exchange operators dominate: the New York Stock Exchange, Nasdaq and Cboe. Competition for primary listings has become fiercer as hundreds of new ETFs launch each year, with ETFs now averaging nearly 30% of daily trading volume on exchanges, according to Bloomberg Intelligence. The Texas Stock Exchange, which aims to start trading in early 2026, has singled out the ETF industry as a priority.

Now, in addition to backing from the likes of BlackRock Inc. and Citadel Securities, TXSE has a deep bench to help it break into the ETP listing market. The big three have all seen leadership leave over the past several month: Marrocco and Hennessy to Texas, of course, but NYSE head of ETPs Douglas Yones departed from the exchange to become the chief executive of issuer Direxion this past November. 

The talent exodus from the well-established exchanges “absolutely” gives TXSE a better shot at succeeding, according to Nadig.

“There just aren’t that many folks who know the listings business,” Nadig said. “The brain drain from two competitors isn’t nothing.”

Trust But Verify

Eventually, there will come a week when this newsletter doesn’t talk about PRIV, State Street and Apollo’s new private credit ETF. But at least for now, there’s still more to say. 

In addition to writing and talking about ETFs on-air, I also host the Money Stuff podcast with Matt Levine, where PRIV has also been a hot topic. A listener recently wrote in recently with this question:

With the advent of a Private Credit ETF, isn’t Adverse Selection an inherent issue?

It’s one of the more cynical theories about putting private assets in ETFs: that perhaps the private credit firm will stuff the fund full of less-than-stellar loans. State Street Global Advisors chief business officer joined me on Bloomberg Television this week, and I flipped that question to her: Does State Street have the in-house expertise to evaluate the securities that Apollo is putting into PRIV? Yes, says Paglia.

“We do have the expertise in-house. Not only do we have the expertise in-house when thinking about this fund and how to structure this fund, we also made new hires to make sure that we had the right talent in place,” Paglia said. “In the end, SSGA is the advisor by design. We wanted to be in a position to make selections and have investment discretion on what assets to take and not to take from Apollo, and that type of expertise was critical.”

Paglia also said that getting additional questions from the SEC post-launch “is not unique — it happens from time to time.” She pointed out that the filing for the fund had been submitted some five months prior to its debut, suggesting a “very healthy dialog with the SEC” that constituted multiple rounds of feedback from the regulators, which, she says, State Street then addressed. 

“We thought the process had concluded, it had not. We got the new comments and we answered those comments within 24 hours,” she said on Thursday on Bloomberg TV. “More drama than was warranted was created in the market.”

In Other News

ETFs focused on defense and arms companies are amassing inflows at a brisk clip as US President Donald Trump pushes for European countries to increase their military spending.

On Friday, a convertible-bonds ETF focused on companies like Michael Saylor’s newly rebranded Strategy that have Bitcoin on their balance sheets began trading.

Emerge Canada Inc., an investment firm known for selling Toronto-listed versions of Cathie Wood’s popular ETFs, has allegedly violated securities laws, according to Ontario’s securities regulator.

In this week’s Drill Down on Bloomberg Television’s ETF, Alex Petrone of Rockefeller Asset Management stopped by to talk about two of the firm’s single-state municipal bond funds: RMCA (Calfornia munis) and RMNY (New York munis).

 

Petrone told us that large states with high tax rates work well in the single-state fund format, given that they have high issuance levels that allow investors to diversify “quite nicely” across sectors. So by that logic, what about a low-tax state, like Florida? Meh, Petrone says:

Not for the bulk of your allocation. You want to reserve your dry powder for national names at different points in time, particularly as you venture into parts of the yield-ier parts of the market or if there’s a dislocation that impacts a sector or a state so we reserve the right to buy some national and often across some of California strategies you’ll see that, but it’s going to be in the areas of the market where we say on, on an after-state tax basis, this is interesting for our investors.

RMCA and RMNY both charge 55 basis points and have gathered $17 million and $5 million, respectively, since their mid-August launch.

AllianceBernstein’s Anita Rausch, VettaFi’s Todd Rosenbluth and Jon McNeill of DVx Ventures join me, Eric Balchunas and Scarlet Fu join me, Eric Balchunas and Scarlet Fu on Bloomberg Television’s ETF IQ. We’re live on Mondays at noon. Watch on Bloomberg Television’s ETF IQ, on the Bloomberg Terminal at TV <GO> and on YouTube.