Growth in the exchange traded fund industry is accelerating as more investors get comfortable using the financial products. Consequently, fund providers have to add new hires to keep up with the burgeoning ETF business.
Since 2000, ETF assets have risen from $65 billion to $1 trillion, or around a 31% annual growth rate.
However, a major hurdle for the future growth of ETFs comes from a lack of awareness or knowledge the average retail investor has about ETFs. As exchange traded products proliferate in the marketplace and become more complex in nature, it becomes evident that investors and advisors will have to understand how the methodology of funds drives performances.
Fund providers will have to allocate new resources, and potentially new employees, to educate both retail and institutional investors on building a global, multi-asset portfolio. For instance, investors will need to understand the various product structures, underlying investments, such as the benchmark indexes, commodities or currencies, and regulatory and tax laws involved.
ETF providers may also revamp their advertising and marketing teams to better target their ETF customer base.
Other opportunities for ETF job growth may come from within large institutions. Mutual fund providers are quickly seeing that ETFs are not just a fad. For instance, Vanguard offers their own ETF products. Brokerage firms Schwab and TD Ameritrade have also entered the field, and the firms are looking to expand their ETF product services into the 401(k) market. The massive 401(k) market may very well be the next big ETF frontier, and companies will need the necessary hands to execute the growth.