Greg Carpenter, chief executive officer of Employee Fiduciary, also points out that ETFs are traded in full shares. Employees may have money that goes uninvested if they do not meet the dollar per share prices. Although, plan providers are working to offer partial shares on ETFs for clients.
Nevertheless, industry observers point to changes in Fidelity that could result in more ETF offerings and force other large competitors to follow suit. Notably, Fidelity’s recent hiring of ETF exeuctive Anthony Rochte from State Street Global Advisors. [Fidelity Hires State Street ETF Exec Rochte]
“”It is very clear they are going to step up their game in ETFs,” James Polisson, managing director of ETFs at Russell Investments, said in the article. “That likely includes 401(k)s.” Fidelity declined to comment on the specifics of Mr. Rochte’s new role.”
ING Direct ShareBuilder 401(k) plan only offers ETF 401(k) plans. Charles Schwab is planning to expand its offerings. TD Ameritrade also provides registered investment advisors ETF and mutual fund options for their employees. [ShareBuilder Expands Its All-ETF 401(k) Plan]
For more information on ETFs in 401(k)s, visit our 401(k) category.
Max Chen contributed to this article.