The Investment Company Institute, the main trade association for the $13.5 trillion U.S. mutual fund business, on Thursday launched a new website to “enhance public understanding” of exchange traded funds.
The new site, www.understandETFs.org, contains educational resources for ETF investors, including a Q&A designed to help investors to better understand the basics of ETF investing, the ICI said in a press release.
The U.S. ETF business totaled $1.2 trillion at the end of August. The ICI said 14 ETF firms were involved with the introduction of the new website.
“Business models and competition aside—this new website educates investors using the ETF industry’s collective thinking. We hope that investors, advisers and other market participants find it a useful tool,” said Jim Ross, ICI ETF Committee Chairman and Global Head of SPDR ETFs.
A recent study by Charles Schwab revealed that 81% of investors think ETFs are here to stay but that many still require more education.
While knowledge about ETFs is slowly spreading, with 39% of investors stating they know more about ETFs than a year ago, 45% of all investors still believe they are “novices” at ETFs. About 34% of ETF owners rate themselves as a “novice” and 57% believe they have “intermediate” knowledge.
On the other hand, 63% of those who don’t own ETFs call themselves “novices,” and 53% of respondents say they don’t invest in ETFs because they don’t fully understand the product, according to the Schwab report. [Schwab ETF Study]
The ICI said its new website features several questions and answers designed to help investors navigate the basics of ETF investing in plain, easy-to-understand language. The site also features links to additional ETF resources.
“Independent studies continue to show ETF usage is on the rise as more investors experience their many advantages,” said Ben Fulton, Managing Director of Global ETFs for Invesco PowerShares. “This initiative will help raise the awareness of ETF construction and potential implementation.”
“Today’s investors are looking for new ways to build better portfolios and they are increasingly turning to ETFs,” added Michael Sapir, CEO of ProShare Advisors. “Our ability to come together as an industry to offer them educational resources is timely and important. All of us have a stake in ensuring investors have the knowledge and know-how they need to invest in ETFs with confidence to achieve their financial goals.”
The 14 firms involved with the website’s launch are: AdvisorShares Investments LLC, Charles Schwab Investment Management, Columbia Management, db-X ETFs, First Trust Portfolios, L.P., FlexShares, Guggenheim Investments, Invesco PowerShares, iShares, Pacific Investment Management Company LLC (PIMCO), ProShares, State Street Global Advisors, Market Vectors and Vanguard.