There are some mutual fund companies who may not appreciate the competition from exchange traded funds (ETFs) but realize they can’t be ignored. They are the minority, as 99% don’t offer ETFs, nor do they relate to or welcome the investors who trade them. Bill Donoghue for MarketWatch.com remarks ETFs are the mutual funds of the future, although they’re less expensive to operate, trade like stocks and have tax benefits.
Top ETF providers include banks, Barclays Global Investors and State Street Global Advisors. The mutual fund companies who have stepped up to address ETFs include Vanguard, ProFunds and Rydex. For Vanguard, they are able to create an ETF extending their index fund management into a new product, and with a lower registration cost. ProFunds and Rydex are also extending their product offering with ETFs that tend to be innovative like their mutual funds.
Donoghue points out that traditional mutual fund managers can’t seem to break from their old strategies. Perhaps these managers are wondering where they would even fit in the ETF world.
Read the disclosure, as Tom Lydon is a board member for Rydex Funds.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.