ETFs should have another excellent year as they provide a great way to invest in stocks, bonds, and commodities. Increases in the number of new ETFs launched, lower costs compared to their counterpart mutual funds, and retail investors becoming more familiar with ETFs are all factors that will contribute to their growth in 2012 and beyond.
With total AUM expected to double to $2 trillion by 2016, ETFs appear to be gaining widespread popularity by all types of investors. In a recent article by the Associated Press, James Ross of State Street Global Advisors said he thinks the 2016 projections are appropriate, pointing to the fact that the previous estimate that ETFs would reach a total value of $1 trillion in 2011 were on track.
Vanguard Total Bond Market ETF
August Koster contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD and SPY.