Familiar ETF selling points, including low fees and superior liquidity, remain sources of allure for institutional investors.
In the BlackRock report, 29% of institutional investors surveyed cited liquidity as an advantage of ETFs while 26% said they favor ETFs for low fees.
Low fees have frequently been cited as significant factor behind Vanguard’s asset-gathering dominance, but other providers are successfully competing on costs as well.
For example, the iShares Core High Dividend ETF (NYSEArca: HDV),iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) and the iShares Core MSCI EAFE ETF (NYSEArca: IEFA) – all members of the iShares core lineup of low-fee ETFs – have added over $6 billion in new assets combined this year.
Current Institutional Usage of ETFs by Asset Class
Chart Courtesy: BlackRock