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Advisors Leveraging New Programs to Launch ETFs
By Advisor Perspectives
There has been a meteoric rise in the popularity of ETFs in recent years. From an investor’s viewpoint, an exchange-traded fund offers several advantages over traditional open-end mutual funds, with the primary benefit being the ability to buy and sell during the trading day and not being limited to end of day pricing. ETFs also have a reputation for low fees.
According to a recent Bloomberg report, the last three years have seen $1.4 trillion flowing into US mutual funds and index ETFs that charge less than 0.5% as fees. There has also been an outflow of $0.9 trillion out of funds that charge more than 0.5%. Actively managed ETFs are still in their infancy and fees are higher than index ETFs, but fee pressure is expected to keep actively managed ETF fees below 1%, 20-40% lower than comparable open end funds.
Read more at Advisor Perspectives.