Exchange Traded Funds (ETFs) are becoming more popular with advisors who have active management disciplines. With few mutual funds able to beat their benchmarks, advisors are able to utilize ETFs and more control of their clients daily allocation.
"Active stock traders are by far the ones using ETFs the most in retail markets," said Carolyn Stewart, vice president of Charles Schwab’s funds product development unit. "Like institutional investors, they use more sophisticated strategies."
Schwab runs the industry’s largest independent marketplace for mutual funds. The discount brokerage says it’s also the top U.S. third-party distributor of ETFs.
Regulators and distributors increasingly are erecting barriers to rapid mutual fund trades. Fund managers say hot money ruins their investment strategy by flooding in and rushing out at inopportune times.
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.