After becoming more familiar with the exchange traded fund investment tool, investors are moving out of plain vanilla, beta indices and into specialized, alternative assets.
According to a TD Ameritrade press release, almost 30% of ETF holdings among TD Ameritrade retail clients provide exposure to commodities and alternatives, 45% of ETF holdings are exposed to U.S. equities, 15% track international equities and 10% follow bonds. [Asset Flows Show Growing Interest for Low-Cost, Passive ETFs]
“Over the past five years, our retail client ETF holdings have more than doubled,” Lule Demmissie, managing director of investment products and retirement, TD Ameritrade, said in the press release. “And, more than ever, we’re seeing investors take advantage of the exposure to more specialized markets that ETFs can provide. More investors, young and old, are using ETFs in increasingly sophisticated ways.”
ETFs have also attracted heavy interest among options traders. Options trades made up 45% of all ETF-related trades on TD Ameritrade in January, 2013.
Additionally, the brokerage firm found that younger investors are taking a greater interest in ETFs. Specifically, investors between the ages of 26 to 35 have 12.7% of their assets in ETFs, whereas investors between the ages of 66 to 75 only hold 6.2% of assets in ETFs.
The TD Ameritrade platform offers commission-free trading on over 100 ETFs.
For more information on the ETF fund flows, visit our ETF performance reports category.
Max Chen contributed to this article
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.