The three keys to ETFs’ popularity
Liz Tammaro: So we know that assets and ETFs have grown tremendously over the past
ten years. Why? Why are ETFs gaining so much traction?
Meet the speakers
Jim Rowley: I think when we think about the popularity of ETFs, we can largely attribute it
to three things. Number one, we think about advisors are doing a greater proportion of their
business on a fee-based mechanism rather than on a commission basis. I think, number
two, there’s been a greater awareness of the benefits of low-cost investing. And I think,
number three, you’re seeing advisors being able to use ETFs to build broadly diversified
portfolios but with a little more element of customization.
And what I mean by that is, you know, there’s a big awareness around indexing and index
methodology and advisors are able to sort of buy ETFs that are made up of all the individual
pieces of an index; and they can build them back up in a building block mentality and
maybe rather than replicate the full market in its natural market cap proportion, they can do
a little bit of leaning and tilting and customize into areas of the market that they feel provide
the best benefits for them.
Liz Tammaro
Moderator
Jim Rowley
Senior Investment
Analyst
Investment Strategy
Group
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