Barclays Global Investors, the largest exchange traded fund (ETF) provider, has been trying to break into the 401(k) market. Most U.S. retirement plan providers won’t offer ETFs because they are concerned with intraday trading. Insiders at Fidelity and Vanguard Group, both ETF providers and 401(k) plan providers, say ETFs are for traders and their retirement clients aren’t asking for them, reports Sree Vidya Bhaktavatsalam for Bloomberg. Retirement plan providers would need new computer systems to accommodate ETFs because current equipment is set to handle mutual funds that are priced at the end of the day. Recently, Barclays and BenefitStreet announced they are working to offer 401(k) plans that include ETFs. BenefitStreet has worked out a way to deal with the intraday trading issue. This area of the market is big as, the number of Americans with a 401(k) plan has doubled to 61 million in the decade ended 2005.
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