Investors hungry for more ETFs

Majority of investors are confident about picking products, others want help

Jun 26, 2014 @ 2:58 pm

By Minda Smiley

Despite the abundance of exchange-traded funds on the market, two-thirds of investors say there's room for more, according to a study released Thursday.

The study, released by Charles Schwab & Co. Inc., which sells ETFs on its platform, also found that seven in 10 investors are confident in their ability to choose ETFs that fit their investment objectives. Despite that confidence, 38% want to better understand how to choose ETFs and 39% could use guidance on how to use them in portfolios.

“It's clear that investors expect innovation and choice when it comes to ETFs, but that enthusiasm is coupled with a desire for a deeper understanding of how to choose and use the products,” Heather Fischer, vice president of ETF platform management at Charles Schwab, said in a statement.

At the end of 2013, there were 1,294 ETFs in the U.S., with nearly $1.7 trillion in assets, according to the Investment Company Institute.

Today, 20% of ETF investors say the products make up at least a quarter of their total investments, up from 16% in 2011. Half of all investors expect their portfolio will have a higher proportion of ETFs in the next five years, according to the survey.

When asked to imagine their investment portfolio as a dinner menu, 57% of investors compared ETFs to a side dish while 13% viewed them as a main entrée. But among the most confident investors, described as those who say they are extremely confident in their ability to choose an ETF, 38% view ETFs as the main entrée in their investment portfolios.

“The future of ETFs certainly appears bright, but as an industry, it is our responsibility to keep the flame alive with the right education and resources so investors can keep pace,” Ms. Fischer said.

The study surveyed more than 1,000 individual investors with at least $25,000 in investible assets who have purchased ETFs in the past two years or are considering doing so in the near future.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Advisers should look beyond 529 plans for college planning

Editor Fred Gabriel talks to reporter Ryan Neal about how college-savings strategies are more important than ever as tuition costs soar.

Latest news & opinion

New ways to pay for college

Experts respond to real-life scenarios of people struggling to afford higher education.

How technology is reshaping the advice business

Artificial intelligence, Amazon and robo-advisers are some of the topics on the minds of tech experts.

Best- and worst-performing sector funds and ETFs this year

A rising tide may lift all ships, but a bull market doesn't lift all stock sectors. Here are the best- and worst-performing sectors this year, with the top and bottom fund in each sector.

Betterment slapped with $400,000 fine from Finra

Robo-adviser cited for violating customer protection rule and not maintaining its books and records correctly.

Supreme Court ruling on SEC judges unlikely to upend advice industry

But it could give rise to new hearings for some advisers who are already in litigation with the agency such as Dawn Bennett.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print