Exchange traded funds continue to bring in new investment inflows and attract investors’ attention as the upstart investment vehicle in the fund industry matures.
According to a Greenwich Associates report, ETFs are being increasingly treated as a class of assets independent from stocks, a major market trend for 2019, reflecting the growing importance and popularity of the nifty investment vehicle in the global financial market, Bloomberg reports.
“The last two years have really seen ETFs come into their own as a tool for institutional portfolios,” Kevin McPartland, managing director at Greenwich Associates and one of the authors of the report, told Bloomberg. “Now it’s time to think about how can we do this better.”
ETFs attracted more than $310 billion in 2018. While the inflows were down about 33% from 2017, the numbers were still the second best performance in the past dozen years, according to Bloomberg data. Additionally, mutual funds have recently seen redemptions, but ETFs continue to bring in the cash.
According to the Greenwich report, investors should stop treating ETFs like stocks. For instance, popular bond ETFs shouldn’t be evaluated as if they are a single stock, even though the investment vehicle can be traded like a stock on a brokerage account.