Industry Trends That Support ETF Expansion

The ETF universe has enjoyed huge growth and many new trends may continue to support the industry.

Growth

Leading the charge as the largest custodian of ETF assets in the world is Charles Schwab. “Our flows year-to-date have been $35 billion as of end of Q3, which is a little over twice that of last year,” Heather Fischer, Charles Schwab Investment Management, said at the Charles Schwab Impact Conference. “So, we’re just seeing phenomenal continued growth of ETF and at the platform.”

The increased assets accumulated in ETFs on the Charles Schwab platform is part of the overall theme across the investment industry as investors and money managers pour more money into the nifty investment vehicle.

Smart Beta

With multiple waves of innovation, smart beta is the buzzword in the ETF business right now and industry leaders are trying to learn as much as they can to support the ETF expansion. “The reality is strategic beta is a very broad umbrella that obviously encompasses strategies from fundamental indexing to momentum to quality and I think sometimes they’re all grouped together assuming that all those strategies are really designed to provide the same outcome- clearly they’re not,” said Tony Davidow, Charles Schwab Investment Management.

Current trends and innovations point to a growing number of investment opportunities and a greater need for educational tools. If employed strategically, there is no doubt the ETF industry is fertile ground for success.