AI Summary
5 min read“It’s a bull market and nobody drinks anymore.” That line, delivered by Todd Sohn, captures the strangeness of the current moment: the S&P 500 is at all-time highs, yet consumer staples—home to alcohol, tobacco, and boring household goods—have shrunk to just 4.5% of the index. The reason isn’t that people stopped drinking; it’s that tech giants like Google and Nvidia are growing so fast they’re crowding everything else out. The denominator is winning. And that dynamic—a bull market reshaped by leverage, thematic mania, and a flood of new products—is the throughline of this conversation.
The ETF explosion: 900 funds and nobody blinks
The ETF industry is launching funds at a pace that would have seemed absurd a decade ago. Todd Sohn, chief ETF strategist for Baird’s Strategas, notes that 2026 is on track to see over 1,000 new ETFs, matching last year’s record. The barrier to entry has collapsed. “ETFs have turned into Napster,” one host says—anyone can set up a fund in a shed and ship it out. Sohn himself was involved in two launches in a single week, neither of which he promoted. The cost of launching and maintaining a dud fund is so low that issuers treat it like a Hollywood slate: release ten films, hope three hit, and let the winners cover the flops.
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What you'll learn
- 1 (00:00) **Opening Banter and Sports Franchise Valuations** - The hosts and Todd Sohn discuss the explosion of new ETF launches in 2026 and then pivot to a detailed breakdown of professional sports franchise valuations.
- 2 (11:09) **Welcome and the State of the ETF Industry** - Todd Sohn is formally introduced, and the discussion returns to the unprecedented volume of ETF launches, exploring what is driving the trend.
- 3 (25:15) **The "New 100 Million" and the Demand for Leverage** - The hosts discuss the new scale required for an ETF to be considered viable and examine the recent volatility in the leveraged ETF space.
- 4 (29:13) **Prediction Market ETFs and the "Heavy Favorite" Bet** - The hosts outline a bold thesis for a new category of ETF based on sports betting and prediction markets.
- 5 (32:17) **The Buffer and Option Income ETF Boom** - The hosts break down the breakout categories of the last two years and Goldman Sachs' recent acquisitions in the space.
- 6 (36:50) **Ecosystem ETFs: Clever Idea or Peak Cycle?** - The hosts analyze a new filing for "ecosystem" ETFs that target the supply chain of major AI players like SpaceX and OpenAI.
- 7 (43:05) **The $3 Trillion Question: Stuck Money Market Cash** - The group examines the massive pile of retail money market funds and debates when, if ever, it will flow back into stocks.
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Show Notes
On episode 255 of The Compound and Friends, Downtown Josh Brown and Michael Batnick are joined by Todd Sohn, Chief ETF Strategist at Baird Strategas, to discuss the record-breaking ETF boom, the rise of thematic and leveraged products, buffer and option-income ETFs, AI and compute as emerging investment themes, and where investor money is flowing now.
They also get into the battle for ETF brand loyalty, whether $1 billion is the new benchmark for a fund that matters, prediction-market ETFs, the outlook for crypto and small caps, healthcare’s comeback, and the trillions of dollars still sitting in retail money-market funds. Plus, why professional sports franchises are starting to look a lot like the stock market—and what Wall Street might package into an ETF next.
This episode is sponsored by VanEck. To learn more about RAAX, visit https://www.vaneck.com/RAAXCompound
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Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
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