After becoming more familiar with the exchange traded fund investment tool, investors are moving out of plain vanilla, beta indices and into specialized, alternative assets.
According to a TD Ameritrade press release, almost 30% of ETF holdings among TD Ameritrade retail clients provide exposure to commodities and alternatives, 45% of ETF holdings are exposed to U.S. equities, 15% track international equities and 10% follow bonds. [Asset Flows Show Growing Interest for Low-Cost, Passive ETFs]
“Over the past five years, our retail client ETF holdings have more than doubled,” Lule Demmissie, managing director of investment products and retirement, TD Ameritrade, said in the press release. “And, more than ever, we’re seeing investors take advantage of the exposure to more specialized markets that ETFs can provide. More investors, young and old, are using ETFs in increasingly sophisticated ways.”
ETFs have also attracted heavy interest among options traders. Options trades made up 45% of all ETF-related trades on TD Ameritrade in January, 2013.