Yet there are large custodians looking into making ETF options available, says Luciano Siracusano, WisdomTree’s chief investment strategist.
“And I think in the next year you’ll probably hear some news about that and hopefully that’s a driver for ETFs within 401(k)’s,” he said.
Additionally, the firm thinks the rise of fee-based advisors who charge clients a percentage of assets rather than commissions will fuel ETF growth. [Ongoing Shift to Fee-Based Advisor Model Supports ETFs]
“On the wirehouse side, you continue to see advisors moving from transactional or brokerage-related business to more fee-based business. ETFs work very well within the fee-based business,” Siracusano said during the recent WisdomTree conference call.
“A second driver is that there are money managers out there … who are now using ETFs in their models. Instead of buying individual stocks, they create their portfolio with ETFs. And so as they grow, it creates demand for exchange traded funds,” he noted.
“The third major trend is in a low-return environment, people are more conscious of fees and taxes. And that lends itself to people taking a look at exchange rated funds instead of traditional actively managed mutual funds,” the CIO added.