Mutual fund companies are bearing the brunt of the anger associated with the fallout of many retirees, and speculative retirees, retirement plans, giving exchange traded funds (ETFs) a chance to grab a share of the industry.
Many U.S. investors have been lashing out at mutual fund companies regarding the dramatic decline in assets, putting more pressure on an industry that already has a lot at stake, reports Jason Szep for Reuters.
U.S. mutual fund companies are wrestling with high levels of anxiety in investors that was unforeseen in this generation. The next questions will have investors wondering how to navigate these uncharted waters.
The bigger picture has mutual fund companies grappling with a shift in the total attitude within the United States about retirement investing. Some academics say the crisis raises questions about the vulnerability of a retirement system managed heavily by fund companies where many workers rely on 401(k)s and similar plans with exposure to the stock market.
U.S. workers have lost more than $2 trillion in retirement savings in the last 15 months. This kind of loss could lead to many workers delaying their retirement plans.
There hasn’t been a market correction of this scope in many decades, so nobody knows how the outcome will be, nor can they guarantee the well-being of the industry at large. This may open up a chance for ETFs to slip in and help investors mend their portfolios.
We’re already seeing signs of this, as mutual funds are seeing outflows this year.
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.