Deborah Draeger: “The Future of ETFs Lies in Greater Sophistication and Education”
The exponential growth of ETFs ceased long ago to be explained solely by flows, costs, and operational efficiency. As these vehicles become established as central tools in portfolio construction, the focus is shifting toward education, innovation, and talent development. It is within this context that the perspective of Deborah Draeger, Co-Head of the South Chapter US of Women in ETFs (WE), is framed, a professional path that combines financial advisory, active management, and work with index providers.
In an interview with Funds Society, Draeger spoke about how the industry has changed with the structural incorporation of institutional investors into exchange-traded funds, anticipated greater sophistication in the use of these vehicles, with fixed income gaining more prominence and new formats emerging, and also said that the US Offshore market will be one of the catalysts for the next stage of adoption.
“Over the course of my career, my focus has increasingly aligned with ETFs,” said Draeger, who holds a Bachelor’s degree in Business Administration & Finance from Hardin-Simmons University in Abilene, Texas, and a Master’s in Investment Management and Financial Analysis (MIMFA) from Creighton University in Omaha, Nebraska. Her professional journey also explains her commitment to WE, the global organization founded in 2014 that seeks to connect, support, and inspire industry professionals through education, networking, and mentoring. Today, WE has over 13,500 members worldwide and continues to expand its regional presence.
Since 2021, Draeger has co-led the South Chapter US, a regional chapter created to fill a geographic gap and which now organizes events, educational programs, and professional development activities across 11 southern US states. The goal is to support an industry that is growing not only in size but also in complexity.
From a market perspective, Draeger identified two major drivers behind the sustained growth of ETFs: greater financial education and the validation of the product through multiple cycles of volatility. “The industry moved from the debate between active and passive management to a much more practical discussion on how to use ETFs efficiently in different market contexts,” she explained to Funds Society.
This change is also reflected in the investor profile. Following initial adoption by the retail segment, institutional use has strongly increased. Today, ETFs are a structural part of institutional portfolios, both for core exposures and for liquidity management, hedging, and tactical positioning, solidifying their role as versatile tools within asset allocation.
A Dynamic Sector
Looking toward 2026, the ETF industry is heading into a phase of greater product and usage sophistication. Alongside the expansion of core equity, fixed income ETFs are experiencing sustained growth, shifting from tactical tools to structural components of portfolios, both in models and in direct allocations. “We are seeing that fixed income ETFs are no longer used only for short-term adjustments, but as permanent building blocks within portfolios,” stated Deborah Draeger. This shift reflects a combination of greater depth in the available universe, improvements in liquidity, and an environment in which investors seek operational efficiency without sacrificing flexibility in risk management.
In parallel, innovation in formats and strategies is accelerating. Active ETFs, model-based solutions, and the incorporation of new narratives are expanding the menu for advisors and institutional investors. “The conversation is no longer only about beta or costs, but about how to use ETFs more precisely and with greater sophistication,” explained Draeger, who holds certifications in Private Markets and Alternative Investments from the CFA Institute; in Blockchain and Digital Assets (CBDA) from the Digital Assets Council of Financial Professionals; and in Fixed Income (CFIP) from the Fixed Income Academy, among other professional credentials.
In this context, she explained, the growth of the US Offshore market and the use of UCITS structures appear as key catalysts: “It’s one of the drivers of the next wave of adoption,” she stated, adding that this is driven by more informed demand and the need to integrate tax efficiency, regulation, and global access in portfolio construction.
Draeger, who was a financial advisor, worked with a fixed income active manager and with tactical strategies in ETF models, and until recently represented index provider S&P Dow Jones Indices, does not see a saturation point for the industry, but rather a new stage marked by increased sophistication. In her view, ETFs will continue to gain ground in fixed income, both as individual building blocks and within models, and will broaden their presence in specific sectors and more specialized strategies. Added to this is growing interest in new investment narratives and innovative formats, in line with the evolution of the capital markets.
For WE, this shift also entails an educational responsibility: from derivatives in ETF format to the emergence of new instruments and narratives (longevity, tokenization, digital assets). Along these lines, Draeger mentioned in the interview the acceleration of conversations around tokenization: on January 19, 2026, NYSE announced the development of a platform for on-chain trading and settlement of tokenized securities, with potential 24/7 operation subject to regulatory approvals.
For Women in ETFs, this process reinforces the importance of education as a strategic pillar. “As ETFs become more sophisticated, understanding how they work, how they integrate into portfolios, and what implications they have is no longer optional,” concluded Draeger. In parallel, the organization continues working to expand talent diversity in the industry, under the premise that product growth and professional development must advance together.
