ETF Trends
ETF Trends

With good reason, exchange traded funds get a huge amount of publicity in the media, the blogosphere and at my blog Abnormal Returns.  According to the Investment Company Institute, ETFs at the end of July held more than $1 trillion in assets.  Not too shabby.

However, that pales in comparison to the roughly $12 trillion in assets held in mutual funds.  You can see via Google Trends that ETFs slowly but surely taken mind share from mutual funds (see chart at bottom of story).

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.  It seems like not a day goes by without news on this front.  These firms recognize the fact that ETFs are the next growth vehicles for the asset management industry. [BlackRock Files Active ETFs]

The question is what about the millions of investors who still have their money invested in open-end mutual funds?  It is one thing to tell these investors to move their money into ETFs.  However in many situations, like 401(k) plans, investors are limited in their choices.

I am not saying that the blogosphere should stop its interest in ETFs, which 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.

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