Exchange traded funds (ETFs) are a relatively new addition to the variety of investment tools available and leaders of the ETF industry are fervent about the usefulness of this investment tool.
Where ETFs Are Now
During the first four months of the year, net sales for mutual funds dropped $5 billion while ETFs experienced net inflows of $7.6 billion, says Joseph Keenan, Managing Director and Head of Relationship Management for BNY Mellon Asset Servicing, in webinar titled Pressures and Potentials in the ETF Market. Several leaders in the ETF industry gathered at the webinar to talk about the latest trends they’ve seen.
Asset Allocation Out, Active Management In?
Bill Thomas, chief executive officer at Grail Advisors, sees investors have been hit hard as asset allocation/diversification failed across the board, and now people are coming back to the markets with different strategies and styles. The market turnaround could be the opportunity for ETFs to shine. He also thinks that value will be leading the recovery, with small-cap firms doing well, then work its way up to large-caps.
Thomas notes that investors may see the benefits of an actively managed strategy in ETFs rather than focus on track records. He also feels that having proven money managers running the funds will be to their benefit.