Google Trends research shows that ETFs have slowly but surely taken “mind share” from mutual funds, writes Tadas Viskanta at the Abnormal Returns blog.
“There is every indication that ETFs will continue to take share from traditional open-end mutual funds. The traditional money managers are chomping at the bit to enter the actively managed ETF space,” he said. “These firms recognize the fact that ETFs are the next growth vehicles for the asset management industry.”
Yet Viskanta notes that mutual fund assets of $12 trillion still dwarf the ETF industry’s $1 trillion. Also, ETFs have yet to make meaningful headway in cracking the 401(k) market, which is still dominated by mutual funds.
“ETFs are a big part of what active investors and traders use these days. It is simply worth putting into perspective the fact that ETFs are not yet, and will not be for some time, the primary investing vehicle for most Americans,” he wrote. “Investing, whether it is in an open-end fund or ETF, is still investing. Just the structure is changed.”
Tisha Guerrero contributed to this article.