The latest research from Cerulli Associates and the Investment Company Institute suggests that investors who use exchange traded funds are more savvy. In fact, the study indicates that investors who use ETFs are wealthier, younger and better-educated.
The mutual fund is viewed as an eight-track tape while ETFs are seen as MP3, reports Jeff Benjamin for Investment News.
Unlike traditional mutual funds, ETFs can be bought and sold during the day. According to the report, advisors aren’t using a lot of ETFs, but those who do are ahead of the curve.
“ETFs are attracting a crowd that understands the benefits of indexing,” said Christian Magoon, chief executive of Magoon Capital Management, on Investment News.
“Because people have to make more of an effort to seek out ETFs, the ETF investors tend to be more engaged,” Magoon adds. “And they are finding ETFs to be a better option.”