The exchange traded fund industry has the capacity to grow but there is a pressing need for more fund education and product development, according to Vanguard Chief Investment Officer Gus Sauter.
From 2000 through 2010, assets in ETFs have grown about 30% per year, Sauter said in a recent speech at the Index Universe “Inside ETFs” conference.
Mutual funds trailed ETFs, with about 5% growth annually, over the same time period. ETFs now hold about $1.5 trillion in investor assets. [ETFs in Focus at AAII Confab]
According to Sauter, the ETF industry has provided investors access to an investment tool that is low cost, diversified and flexible, while still remaining somewhat simple. [ETFs in Focus at Schwab Conference]
There have been several misconceptions about the ETF industry and confusion has been a result over the recent years. From the “flash crash” in May 2010 to being the root of overall market volatility, ETFs have taken the blame due to general ignorance about the funds. [ETFs Gaining Momentum at the Morningstar Confab]
Sauter urged more financial professionals to take the time to educate clients and provide a voice of reason for the industry at large, according to a report on Vanguard. Sauter compared the volatility of the U.S. stock market to that of the German stock market. [Vanguard Bullish on ETFs]