“With PIMCO having recently launched the Total Return clone ETF, it could be a watershed event for advisors’ adoption of fixed-income ETFs,” Davidow added. “If more popular active bond fund managers supply ETF versions of their funds, then demand for fixed-income ETFs will increase.”
Davidow also believes that as RIAs seek niche or focused areas of the market to invest in, the ETF industry will have to accommodate the new demand.
“RIAs are demanding finer slices of the capital markets and access to unique market segments,” Davidow said. “Not all can be efficiently accessed via an ETF structure, but increased demand will lead to more product innovation in inefficient markets or asset classes.”
For more information on ETF industry, visit our current affairs category.
Max Chen contributed to this article.