Family Office World

How Family Offices Approach ETFs with Zach Wainwright and Ron Diamond

The video features Zach Wainwright explaining why ETFs are becoming a core tool for family offices seeking tax‑efficient investing, set against a backdrop of growing interest from billion‑dollar families. Wainwright outlines how ETFs generate “tax alpha” by using in‑kind creations and redemptions that avoid taxable events, delivering roughly two basis‑point advantages over comparable mutual funds. He also describes the “innovator’s dilemma” that large asset managers face when offering active, custom ETFs. He cites concrete examples – a 30‑fold compounding of an S&P 500 ETF over 30 years and the use of Section 351 exchanges to roll appreciated portfolios into new ETFs tax‑free – underscoring the practical benefits for high‑net‑worth investors. The discussion predicts a surge in bespoke, family‑office‑specific ETFs that combine liquidity, dynamic asset allocation, and tail‑risk hedging, signaling a shift toward higher‑touch, after‑tax solutions that could reshape wealth‑management strategies.