A mere 10 years ago, exchange traded funds (ETFs) were viewed as a supplement to the stalwart mutual fund industry. Today, mutual funds are fighting to hang onto an increasing stream of outflows into ETFs.
Chuck Jaffe for MarketWatch noticed the shift in the ETF conversation while at the Morningstar Investor Conference in Chicago last week.
He cautions that ordinary investors should be aware of the shift that’s taking place right now, because things are about to change forever. Three signs of the times:
- Vanguard announcing 19 new funds that will have ETF share classes. [The ETF Fee Wars Wage On.]
- Grail Advisors‘ announcement that it will have bond ETF run by DoubleLine Capital, which is run by Jeffrey Gundlach, a star in the bond fund realm.
- Huntington Asset Management, the manager of 24 traditional mutual funds, filed to roll two of its funds into ETFs. [Schwab Slashes Fees on Six ETFs.]
This move into ETFs is due in part to recognition of the popularity of ETFs, particularly those that passively track indexes. In fact, a recent study has projected that global assets into passively managed products will jump from 15% to 25%, reports Joe Morris for Ignites.
Driving this trend includes retail investors in the United States, rebalancing in sovereign funds and pension funds’ embrace of equity derivatives. [ETF Providers Duke It Out.]
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.