Exchange traded fund (ETF) investing is changing the entire landscape of managing money, and the trend is drifting toward a more hands-on approach. ETF providers are beginning to understand that investors want to know what is happening and why, not just buy and hold a product they don’t understand.
The broker-dealer relationship is transforming since the advent of the ETF, and providers are more willing than ever to step up to this fiduciary responsibility, reports Jessica Toonkel for Investment News. With ETF investing there are more details and fine print going on, and there are a lot more decisions that advisers need to make about how they will conduct their trades to make sure they get the best execution. [How ETFs Are Changing Investing, Markets.]
For starters, staying on top of the bid-ask spreads of the ETFs, as well as their liquidity, is imperative to make sure one is getting the best prices on trades.
In the mutual fund world, advisers often complain that wholesalers just want to sell them products. ETF wholesalers are more than willing to educate advisers on how to trade ETFs and get the best prices. [ETF 101: What To Watch For When Investing.]
Tisha Guerrero 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.