Investors Want More of This Financial Product, But Beware
More never seems to be enough when it comes to investment choices. Exchange-traded funds (ETFs) are an innovative financial product that have surged in popularity over the past decade. There is practically an ETF for every corner of the market and map these days. Yet the majority of investors still believe there is room for more. Are they right?
According to a new survey from Charles Schwab, 66 percent of investors say there is room for more ETFs on the market today. Among them, almost 60 percent say more ETFs will result in lower fees through increased competition, while 28 percent credit additional ETF choices as the primary industry trend that has most benefitted investors over recent years. The survey polled more than 1,000 individual investors with at least $25,000 in investable assets who have purchased ETFs in the past two years or are considering doing so in the near future.
“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,” said Heather Fischer, vice president of ETF platform management at Charles Schwab. “Although 40 percent of investors still consider themselves ETF novices, that group has been steadily shrinking and is down from 45 percent in 2013. What this means is that education remains a top priority but as ETF investors are becoming increasingly savvy, they are seeking products, strategies, and access that go beyond the basics.”