Success in a Low-Return World by Michael J. Oyster

Author:Michael J. Oyster
Language: eng
Format: epub
ISBN: 9783319998558
Publisher: Springer International Publishing

The Future for ETFs

Whether in a brokerage account, IRA, or some other investment pool, ETFs offer tremendous opportunities for expedient diversification and access to specialized markets, strategies, styles, or factors, usually through a passive, low-cost vehicle. Institutional investors typically have a large asset base to invest, which can gain them access to the lowest cost index funds and many are nonprofit organizations with little to no tax liability and don’t normally need daily liquidity, but that doesn’t mean institutional investors should ignore ETFs. An institution may use ETFs as a place to park some money before allocating it to a different manager, such as a hedge fund that only accepts new money periodically. They might also utilize ETFs to target a specific subset of the investment universe or hedge risks to which they are exposed elsewhere in the portfolio. If you have an investment problem, there is probably an ETF that can help solve it.

And the future? It looks very bright for ETFs. According to Charles Schwab, over 60 percent of millennials have either begun replacing or begun considering replacing their individual securities with ETFs.6 Millennials are generally cost conscious; a group that grew up with the internet and are accustomed to receiving items of value for free. They also like to view pricing throughout the day, for which ETFs have data available—stodgy old mutual funds are only priced once per day (#gasp). ETFs have grown well beyond the curiosity they were in the early 2000s. As the group retains its solid foundation replicating traditional indexes, continues to move into factors and then beyond into even more complicated strategies, still wider acceptance seems likely.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.