Active exchange-traded funds are about 13% of the market and have taken close to 40% of this year's flows, on the numbers Scott Dennis gave.
The standard story about exchange-traded funds is that cheap index exposure keeps winning. Dennis runs a business built on the opposite bet: concentrated portfolios of 20 to 30 stocks, and a fixed-income lineup two-thirds weighted to the part of the bond market most portfolios barely own.
"I just don't want people to become complacent."
Dennis joined TCW about 18 months ago to build an exchange-traded fund business inside a firm that had been running money for three decades, and it now holds more than $7.6 billion against the firm's roughly $200 billion.
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Here are the 9 takeaways that matter.
👤 Guest: Scott Dennis, Head of ETFs at TCW, whose exchange-traded fund business holds more than $7.6 billion of the firm's roughly $200 billion
🎙️ Hosts: Carol Massar and Tim Stenovec, who anchor Bloomberg Businessweek Daily, live from the Future Proof conference in Huntington Beach, California
🧩 Other segments: Tony Davidow of Franklin Templeton, Jan van Eck of VanEck, and Jaime Magyera of BlackRock
📰 Published: 15 September 2026 on the Bloomberg Businessweek Daily podcast
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ length not available
Key Takeaways
Active ETFs are 13% of the market and have taken close to 40% of the flows this year
His pitch is not a better idea but an old one in a new wrapper
TCW has run securitized credit for three decades; the ETF is the distribution change, not the strategy
Investors are underweight the part of the bond market that finances their own lives
Securitized credit is a small share of the aggregate index, so index-tracking portfolios barely hold it
He is not trying to beat the S&P 500 and says advisors never raise it
The equity funds hold 20 to 30 stocks concentrated by theme, which he says is not comparable
Income is the only thing fixed-income advisors want to talk about
The biggest risk he names is complacency, and the evidence is that credit and equities are telling different stories
Credit spreads are tight with almost no volatility while equity markets are moving
1. A New ETF Shop at TCW
It was Dennis's first Future Proof, which the hosts spotted from the clothes before he said it — the giveaway at this conference is a suit.
Stenovec set out the scale: the ETF business at TCW is relatively new and holds more than $7.6 billion, while the firm itself runs around $200 billion.
Dennis said he was shocked at how many people were there, having walked the event the previous night and found he could not move. Stenovec added that hotels from Huntington Beach down to Newport Beach are full of attendees.
His purpose at the conference is distribution, and he was direct about it: "Why I'm here is, A, to get TCW's ETF business out in terms of outlets like this, as well as talk to advisors about it."
The firm's age is the credential he leads with, against a fund lineup that is not: TCW has been in business for three decades.
2. Wrapping What They Know
Stenovec asked how a new entrant stands out in a market this crowded.
"Well, our growth rate has been exceptional." He claims a place at the top of the table: "I would say that we are one of the top fastest growing ETF advisors out there, providers out there in terms of asset growth."
His rule for what to launch is not to chase a category: "So from my perspective, we're producing products that we are already known for, that we're already good for."
The two examples he gave are PWRD and a new securitized income fund, TISE, both built on strategies the firm has worked on for years.
"So we're just wrapping it in an ETF and we're producing it and we're having a lot of success." His summary of the outcome was that the numbers are great.
On the asset growth he gave a figure and a date range he corrected mid-sentence: "I mean, we've grown in the last, back to 2020, end of 2024, we've grown almost 250% in terms of assets." He said that outpaces the rest of the business, while insisting the ETF is not better than anything else TCW offers.
3. Why Securitized, Why Now
Massar asked why a securitized income ETF, and why this was the moment for it.
The gap was internal before it was a market call: "I joined TCW about a year and a half ago, and I always had known TCW as sort of a securitized shop or securitized credit shop, sort of in that vein, mortgage shop."
"And I was surprised that we didn't have a securitized product."
There is a supply reason for that: "There's not a lot of securitized products out there. They're somewhat challenging to put into an ETF wrapper." Getting one done was his goal.
The relative-value case is about what is left: "You guys know this, high-yield credit spreads and IG spreads are extremely tight." There is value in credit, he said, but not as much as in securitized products.
The structural case is about who owns it. "Securitized products historically have been very institutionally owned," and in the aggregate bond index securitized credit is not a large share.
That is why he says the gap exists: "So investors' portfolios are underweighted in sort of the securitized market, even though it's things that people finance." The assets are the loans behind everyday life.
4. ETF or Mutual Fund
Stenovec asked whether the plan is to build ETFs that mirror what sits in TCW's mutual funds, and whether the two sides of the house compete.
Dennis said it is a permanent internal conversation. "So we are a mutual fund shop. We are an ETF shop. There's not one that we feel is better than the other."
Stenovec pointed out that one of them is far bigger. Dennis's reply: "There's one that's way bigger, but there's one that's growing."
The choice is made per client rather than per product: "So when we take a look at what we're going to produce, we just take a look at what solution the advisor is looking to fill." A client who is not taxable is well served by a mutual fund; a taxable client may be better off in an ETF for the tax efficiency.
He added a third variable the industry is still working through: the dual share class, where an ETF and a mutual fund are two classes of the same fund. Stenovec noted that every shop is grappling with the same question.
Massar said her first job was about getting mutual funds out to the masses, and that the show now has an ETF program rather than a mutual fund one.
5. Where the Flows Are
Massar asked where the money is going in and out.
The equity flagship is PWRD, which he described as picks and shovels for energy transformation. The thesis is capital spending: "There's going to be a tremendous amount of capex that goes as the U.S. infrastructure from an energy and power perspective transitions."
He was explicit that it is a long-dated theme and an active one, not a one- to two-year trade, so the holdings change as the opportunity set does.
Close to $400 million has come into that product this year, and his answer on whether it is slowing was "Nothing is slowing down."
He would not promise a smooth ride: "This market is very tough, which is why we're active." The fund is not one he expects to be winning every single day, and he asked to be judged on where capital spending generates returns over the long run.
The counter-example inside his own lineup is the AI fund, which has not gathered assets: "We have not seen as many assets in that, even though performance has been tremendous in that." Asked whether power or AI is the bigger story, he declined to rank them and said the power fund is simply taking in more money.
On the fixed-income side: "Our flagship fund is Flexer. It's a flexible income fund, FLXR." It holds about $3.6 billion and has been the engine of growth, at roughly two-thirds securitized assets.
What is pulling money in is the coupon, not the total return: "People want income. Interest rates are still elevated." He put the available yield at around 5% and called a fund that can move between asset classes while paying income a home run.
6. Active Is 13% of the Market
Stenovec turned the question around and asked what the roughly 5,000 other attendees are telling him their clients want.
"So on the fixed income side, they're a hundred percent talking about income." After that it is the regime — rate uncertainty, rate volatility and geopolitical risk — which is what he says makes the case for active management.
The share-versus-flow gap is the number he leads with: "Beta is obviously the huge horse in the room, but until you look at active flows, like even though active ETFs are only 13% of the market, they've taken in close to 40% of flows this year."
His description of what advisors are asking for is a barbell: index exposure for beta, and something that moves with the market to add returns on top, over monthly, yearly or longer horizons.
On the product pipeline, the constraint he named is saturation. The questions he asks before a launch are whether the sector is already crowded, whether TCW is good at it, whether the firm fits, and where to price it — a mix of quantitative and qualitative tests. The observation that there are now more exchange-traded funds than single stocks went unchallenged in the exchange.
7. Not the S&P 500
Massar asked whether it is hard to sell active management against what the S&P 500 has done since 2008.
"I think it is very challenging. Honestly, in advisor conversations, that doesn't come up." Massar's reaction was that it should.
His explanation is that the sales conversation rules the comparison out. TCW's distribution team says plainly that these funds are not the index.
The portfolios are built so the comparison does not apply: "So we have 20 to 30 stocks," concentrated on a theme and in certain sectors, and evolving as markets change.
He does not think a concentrated thematic fund can fairly be measured against a 500-stock capitalization-weighted index, while acknowledging that everyone would like to be the index.
Stenovec recommended the Bloomberg ETF research of the firm's own analyst, Eric Balchunas, which Massar endorsed.
8. Hot Sauce or Core
Stenovec asked whether these funds are the spicy 5% or 10% of a portfolio rather than the core.
On equities he accepted the framing: a concentrated active ETF is a satellite position.
On fixed income he said the opposite is happening. Active is the hot sauce, but it is also becoming a satellite that moves into the core — investors taking an overweight in securitized credit and pulling it toward the middle of the portfolio.
His reason is what the typical portfolio already owns: in his firm's view, investors are generally overweight credit and overweight rates, where there is not much relative value left.
A flexible income fund in the core is his answer — income plus diversification across the rest of the asset mix.
He came back to the same structural claim: securitized assets are underrepresented in wealth portfolios in general, which is where he sees room to grow.
9. The Risk Is Complacency
Asked for the biggest risk to the market in 20 or 25 seconds, Dennis named a behavior rather than an event.
"I just don't want people to become complacent."
The evidence is a divergence between two markets that usually agree: "Credit spreads are extremely low volatility, and they're extremely tight."
"Equity markets are volatile, and they're telling a very different picture in terms of what's going on in fixed income."
The question he says he is working on is which one is right — whether equities are pricing something about companies that credit is not, and whether that eventually feeds through.
"I'm always surprised at the resilience and the low volatility we've seen in credit spreads has been tremendous this year compared to everything that's going on in the world" — and, he added, at these asset levels.
Massar closed on the question she says the show keeps asking: what are we missing? Stenovec's answer was that they will find out when it hits.
Bonus Insights
Dennis's read on why the ETF wrapper matters for this asset class is access rather than performance. He called it democratizing in terms of distribution, because securitized credit has been an institutional product.
The hosts' test for spotting a first-time attendee at Future Proof is the suit; Stenovec said he was the one sweating in one last year.
Dennis would not claim the ETF is a better vehicle than anything else TCW runs — his repeated framing is that it is the same expertise in a different package, chosen to fit the client's tax position.
Dennis's bottom line is that the growth in his business comes from putting an old institutional strategy into a wrapper wealth portfolios can buy, at a moment when tight credit spreads leave securitized assets as the place he still sees relative value — and when the calm in credit is the thing he would least like investors to take for granted.
Products, Companies & Tools Mentioned
TCW (His employer, three decades old, with roughly $200 billion under management and more than $7.6 billion in its newer ETF business)
PWRD (TCW's picks-and-shovels energy transformation ETF, which has taken close to $400 million this year)
TISE (The newly launched securitized income ETF, built because he was surprised the firm did not already have one)
FLXR (The Flexer flexible income fund, about $3.6 billion and roughly two-thirds securitized, and the firm's fixed-income engine of growth)
Books & Resources Mentioned
Eric Balchunas' ETF research on the Bloomberg terminal (Recommended by Stenovec and endorsed by Massar during the segment)
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