Do Staten Island’s gang of misfit nosferatu Nadja, Laszlo, Nandor or Colin Robinson from the mockumentary What We Do in the Shadows even care about crypto?

There’s a new ETF that is a creature of the night, trading in futures, options and other exchange-traded products. During the day, the Nicholas Bitcoin and Treasuries AfterDark ETF (NGHT) goes to sleep, holding short-duration Treasurys and cash. Meanwhile, investors can get their diurnal bitcoin fix via any number of funds now on the market, most recently Morgan Stanley’s ETP, which undercut the competition on price by at least a basis point. Both of the new products launched Wednesday.

Making the case for bitcoin exposure overnight, David Nicholas, CEO of Nicholas Wealth’s XFunds, points to returns for the iShares Bitcoin Trust of 200% since inception through March, during non-US trading hours, while intraday prices were down 50%. “All of the gains for IBIT can be accounted for in the overnight hours,” he said. Overall, IBIT has climbed about 66% since it started trading.

Out All Night

Some investors will probably be intrigued by this and at least supplement their spot bitcoin fund exposure with NGHT. That may not keep BlackRock up at night, but Morgan Stanley’s fund has the potential to divert some market share away from the $56 billion industry leader. After all, the Morgan Stanley Bitcoin Trust charges a slim 14 basis points, compared with IBIT’s 25 (the Nicholas Wealth fund charges 97). It also has the benefit of being in front of the company’s 16,000 advisors. “Our platform has historically been based very much on a wirehouse/RIA perspective,” said Ally Wallace, global head of ETF strategy at Morgan Stanley Investment Management. “This is really our first product that goes after all the client segment channels.” And regarding price, “We definitely wanted to come out with a lower expense ratio to show the commitment to raising assets in the space.”

That fund is among the most successful launches so far this year:

• Its trading volume came in at $34 million and a reported $30 million in net inflows on its first day, several crypto publications reported.
• “We’re definitely happy with it,” Wallace said. “We were all pleasantly surprised by it.”

Vampire Weekday: While the debut of Morgan Stanley’s fund is the biggest event in spot bitcoin since IBIT, the Nicholas fund has broader implications. Until recently, diversification was something investors thought about only across asset classes, Nicholas said. With NGHT, along with ETFs that could use tokenization to trade at all hours, time diversification is also something to consider, he said. For bitcoin in particular, there is some natural profit-taking that happens in the morning, following strong appreciation at night, which is part of why after-hours returns have been stronger over time, he noted. “It makes sense to have some allocation to night,” he said. “It gives you that time diversification, which is a whole new way to think about investing.”

ETFs are looking a lot like Vin Diesel circa 2001: fast, furious and showing no signs of slowing down.

After a record year for launches, inflows and AUM in the US, assets in these funds could roughly double to $25 trillion by the end of the decade and hit $40 trillion by 2035, Citigroup analysts said in a recent note. While the industry held some $13 trillion in assets as of April, per FactSet data, even those numbers could be a bit shy. The research firm ETFGI is projecting assets to hit closer to $33 trillion by 2030, said founder Deborah Fuhr. It’s further proof that the ETF industry has plenty of room to run.

“It’s hard for the asset management industry to ignore that investors are preferring ETFs,” Fuhr said. “Most firms now are really looking to have some ETFs in their toolbox.“

Full Throttle

Pension funds, asset managers, hedge funds, advisors and retail investors are all pouring money into ETFs, which have the appeal of being more tax-efficient and lower-cost than their mutual fund counterparts. Citigroup said that active ETFs could drive a significant portion of the forecasted growth. Active funds have exploded in popularity of late, thanks in part to interest in single-stock and options-based strategies, structured product outcomes and alternatives funds including crypto ETFs. Mutual-fund-to-ETF conversions also hit a record high last year.

“We’re still early in the use and adoption of ETFs,” Fuhr said. But continued growth won’t come without challenges:

• There is concern about whether the number of authorized participants and market makers can keep up with all the new products, Fuhr said.
• One of the other challenges could be how tokenization impacts the growth of ETFs and mutual funds.

Still, the US ETF market has a lot going for it. For instance, Fuhr said that 24/7 trading, which major exchanges have been pushing for, could mean more investors turn to US ETFs when their markets are closed for the day.

Speed Bump: Not every fund will be around long enough to contribute to those AUM milestones, however. With the massive growth in ETF product innovation also comes record closures: 146 active ETFs shuttered last year, per Morningstar data.

The popular kids always end up the most successful adults … er, right?

There are a few exchange-traded funds that invest according to the wisdom of the crowd. One such product, the SoFi Social 50 ETF (SFYF), holds the most popular stocks among SoFi customers. And that firm is extending the strategy to a new fund with a high-income flavor.

There are some similarities with momentum funds, which means there’s a lot that can go right or wrong: They are more volatile than the broader markets. “A lot of sentiment is going to be based on what’s doing well and what’s not doing well,” said Daniel Sotiroff, senior manager research analyst at Morningstar. “Momentum has risks and rewards with it. It works really well in environments where the market is stable and you have consistent leadership.” On the other hand, such funds “do poorly when you get into really volatile environments,” he said.

Hot or Not

Social sentiment may be used by numerous actively managed funds to help inform their stock selection, though only a couple of products rely almost exclusively on that kind of data. For example, VanEck’s Social Sentiment ETF (BUZZ), launched in 2021, makes decisions based on AI analysis of millions of data points from news coverage, blogs and comments in online forums. That fund holds 75 stocks, with no single name getting more than 3% weight. The company on April 1 added the VanEck MSCI EAFE Analyst Sentiment ETF (VEFA), which invests according to aggregated data from analyst forecasts and revisions. It has also filed for an emerging markets fund that would similarly use analyst sentiment.

A look at how some funds have performed:

• The SoFi Social 50 ETF has dipped 5% year to date but still boasts a 45% gain over the past year.
• BUZZ has dropped 10% so far in 2026 but is still up 40% over 12 months.
• The iShares US Thematic Rotation Active ETF (THRO), which uses social data but is not entirely a sentiment fund, has slipped less than 1% year to date, remaining up 26% over a year.

Social Currency: The Social 50 High Income ETF (SFYI) that Tidal recently filed with the SEC would invest in SFYF or the constituent stocks and use options for income. Tidal did not respond to a request for comment about the forthcoming fund or SFYF. The existing fund, which launched in 2019 and represents $35 million in assets, has net fees of 29 basis points. Its top holdings are Tesla, NVIDIA, Amazon, AMD, Alphabet, Berkshire Hathaway, Apple, Microsoft, Meta and Palantir.

That’s what you get when you follow the crowd.