With over $1.2 trillion in assets, the exchange traded fund universe has quickly expanded as investors look for efficient and easy-to-use investment tools. Looking forward, the increasing usage of ETFs will likely come at the expense of the mutual fund industry.
According to a Guggenheim Investments survey of financial advisors, retail investors will be picking ETF products over traditional mutual funds next year, reports Kenneth Rapoza for Forbes. [Growing Interest for ETFs Among RIA Clients: Schwab]
“The results from the survey indicate a growing appetite amongst financial advisors to incorporate ETFs into retail investors’ portfolios over the next year,” William Belden, Director of Product Development at Guggenheim Investments, said in a press release.
Of the respondents, 78% plan to raise ETF allocations in their client portfolios over the next year, whereas only 28% of respondents were unsure about increasing ETF allocations and 1% does not plan add more assets to ETFs.
About 71% of advisors cite convenience and liquidity as the biggest advantage to fixed-income ETFs in retail investor portfolios, 16% point to low costs as the largest advantage and 13% state that transparency and tax advantages are the primary benefits.