Exchange traded funds (ETFs) cover all the major asset classes, global regions and sectors. So, it’s little surprise that they’re growing in popularity with all types of investors – including pension funds.
Deutsche Bank observed that ETFs are growing in popularity among pension funds and wealth managers, especially for ETFs that cover broad equity indexes such as the MSCI Europe or MSCI World Index, writes Chris Flood for The Financial Times.
Even Harvard’s endowment has increased its holdings in ETFs, particularly those that give exposure to fast-growing emerging markets. The endowment, the world’s largest and most closely-watched, currently has $1.2 billion in ETFs. [Look Inside Harvard’s ETF Portfolio.]
Before ETFs, investors would only gain exposure to those markets by purchasing multiple futures contracts to gain access to the MSCI World Index. With ETFs, any retail investor may gain some exposure and with less tracking error. [6 Things Every ETF Investor Should Know.]
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.
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.