Additionally, hedge funds are contributing to the growth of ETFs by boosting usage of the products. For example, Ray Dalio’s Bridgewater Associates, one of the world’s largest hedge funds, features the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), SPDR S&P 500 ETF (NYSEArca: SPY) and the iShares Core S&P 500 ETF (NYSEArca: IVV), among other ETFs, among its top equity holdings. [Bridgewater Alters Some ETF Positions]
At the end of the first quarter, David Tepper’s Appaloosa Management LP owned over $1.3 billion in the PowerShares QQQ (NasdaqGM: QQQ) and SPY. Fees are another reason investors are increasingly turning to ETFs.
“There are big differences in the fees between hedge funds and ETFs. Hedge funds currently average a basic charge of 1.5% of the assets managed, plus 18% of performance, according to HFR. Charges for ETFs average 0.31% of assets, according to ETFGI,” reports Daisy Maxey for the Wall Street Journal.
Chart Courtesy: ETFGI
Tom Lydon’s clients own shares of IVV, QQQ and SPY.