Jacobs also points out that there is further room for index-based ETF to grow. For instance, retirement savings plans have not widely adopted passive ETFs. Additionally, ETFs are still making inroads into foreign bourses.
The industry is still crafting innovative ideas. For example, recent ETF launches track factor-based Nasdaq indices, including the First Trust NASDAQ Rising Dividend Achievers ETF (NasdaqGM: RDVY), which was launched in January, and PowerShares International BuyBack Achievers Portfolio (NasdaqGM: IPKW), which began trading at the end of February. [Buybacks Slowing, Buyback ETF not so Much]
For more information on ETF indices, visit our indexing category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of QQQ.