The exchange traded fund industry is still dominated by the top providers, but other fund sponsors are attracting greater investment interest, capitalizing on their own specific market edge.
PIMCO and Charles Schwab have now gathered over $10 billion in assets under management for their ETF products, reports Chris Flood for the Financial Times.
Charles Schwab has been firing off in the so-called fee war, undercutting competitors, and now offers the lowest expense ratio on ETFs. ETFGI calculates that Schwab ETFs come with an average 0.077% expense ratio.
According to Schwab’s proprietary research, investors identified cost as the most important factor when picking an ETF. The company has revealed an increase in inflows due to its reduced fees.
Moreover, Schwab launched the ETF Education Exchange to help disseminate information on the investment vehicle. Last month, the firm opened the Schwab ETF OneSource program, extending commission-free trades on a range of ETF products. [Schwab Unveils Game-Changing Commission-Free ETF Platform]
Meanwhile, PIMCO has attracted investment interest through focusing on actively managed ETF products.
Douglas Hodge, chief operating officer at PIMCO, explains that PIMCO’s strategy is to use ETFs to utilize the company’s “culture of innovation and thought leadership.”
PIMCO has successfully adapted its flagship Total Return fund into an ETF, the PIMCO Total Return ETF (NYSEArca: BOND), which has gathered $4.5 billion in assets since it started trading last year. [PIMCO Total Return ETF Nears One-Year Anniversary]
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.