S&P: "The Next Phase for ETFs Is Decentralized Finance, Private Markets, and Wealth Management"

According to industry experts, the future growth of Exchange Traded Funds (ETFs) that track indexes will be driven by decentralized finance (DeFi), private markets, and wealth management (WM).

Cameron Drinkwater, Chief Product and Operating Officer (CPO·COO) of S&P, stated at 'Korea Premium Week 2026', which took place on the 29th in Euljiro, Seoul, that “the ETF sector represents one of the most important innovations in modern finance.”

Cameron Drinkwater, Chief Product and Operating Officer (CPO·COO) of S&P, is giving a speech at the 'Korea Premium Week 2026' held on the 29th in Euljiro, Seoul. Photo by Kim Youngwon

He mentioned that ETFs have transformed the paradigm of asset management through features such as transparent rules and broader market access. However, he pointed out that “investors are increasingly diversifying,” and are “seeking new sources of returns and opportunities that exist beyond traditional asset classes and conventional market data.”

He identified three areas where ETFs should explore future growth: decentralized finance, private markets, and wealth management. Drinkwater highlighted, “As asset management firms and ETF issuers expand their involvement with digital assets, there is a growing need for robust data, transparent rules, and trustworthy governance to support this growth.” He added, “In response, S&P Dow Jones has developed and launched benchmark solutions in collaboration with our platform partners.”

He emphasized ‘demand’ as the main reason for identifying private markets as a key growth area. Drinkwater further explained, “Institutions worldwide—including pension funds, insurers, and sovereign wealth funds—are continuously increasing their allocations to private equity and private lending, and at the same time, there is a rapid rise in interest from individual investors. This type of growth naturally creates new demand.”

He also pointed out that the value of indexes that can accurately measure the performance of the private market is rising. He said, “Due to its structure, the private market operates differently from the public market. It is less liquid, has a longer valuation cycle, and develops according to the long-term perspective of internal strategies. This is precisely where indexes can deliver value.”

He projected that index-based strategies will also become increasingly prevalent within the field of wealth management. According to Drinkwater, “For decades, financial advisors have typically pursued differentiation through stock selection. Today’s investors, however, are seeking comprehensive advice that spans financial planning, retirement, and taxes.” He continued, “Accordingly, advisory firms are now focusing less on selecting individual assets and more on delivering holistic asset management outcomes. Indexing is what enables this transformation.”

He also noted, “As the expertise of advisory firms increases, there is a growing awareness that the construction of an index can significantly influence investment results,” and “there is heightened attention to index design, methodology, and governance.”

Drinkwater stressed, “Across the three core areas of decentralized finance, private markets, and wealth management, indexes will continue to play a foundational role by providing transparency and consistency to an expanding investment landscape.”

This content was produced with the assistance of AI translation services.