The ETF industry took flight nearly two decades ago, an addition to the investing landscape spurred by disappointment with traditional actively managed mutual funds and interest in developing more flexible tools consistent with an index-based strategy. Though the very first ETF was built with traders in mind, ETFs quickly emerged as an ideal fixture for “buy and hold” portfolios. ETFs have exploded onto the scene in recent years, with over 1,100 products now available and plenty more on the way. As the popularity of these investment tools has grown, so too has their reach in today’s markets. The average investor can now obtain exposure to a number of asset classes that would otherwise not be available using the exchange traded structure. One of the most promising and newest frontiers in the ETF industry is the actively-managed space, a corner of the market that combines the flexibility and efficiency of the exchange-traded structure with the attempt to generate excess returns [see also Seven Wildly Successful Active ETFs].
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The last few years have seen no shortage of innovations in the ETF space. Opportunistic issuers have capitalized on a shift in investor mentality by rolling out ETFs offering never-before-seen levels of granularity in emerging markets. IndexIQ introduced hedge fund replication ETFs, a line of products that initially drew skepticism but has now been embraced [...]
When the ETF industry burst on to the investing scene, the initial wave of growth was driven primarily by equity products that sought to replicate the performance of well-known indexes, including the S&P 500, Dow Jones Industrial Average, and Nasdaq. In recent years cash flows to these “super index” equity ETFs has slowed, but exchange-traded [...]
With markets struggling as of late, value investing has seen a spike in popularity. Virtually all asset classes have been pummeled over the last week, as the debt crisis in Greece and the oil spill in the Gulf of Mexico continue to weigh on markets around the globe, pushing equity prices down sharply in particular [...]
Post-recessionary periods often present an excellent investment environment for cyclical sectors, while non-cyclical corners of the economy tend to lag behind. Even after last Friday’s Goldman nightmare, financial ETFs are soaring higher in 2010, followed closely by retail and transportation funds. Meanwhile, energy and utility ETFs have shown significant weakness in recent months and have [...]
During the Great Recovery of the last 12 months, every sector of the U.S. and global economies have gained ground. But some industries have performed better than others, resulting in big performance gaps between various sector-specific ETFs. According to ETF Guide, the Vanguard Total Stock Market ETF (VTI) rose 28.8% but the technology sector SPDR [...]
While the ETF world started by focusing on tracking well known indexes such as the S&P 500, it has significantly branched out in recent years, giving investors funds tracking everything from commodity indexes to quantitative methodologies that attempt to deliver excess returns. These quant ETFs haven’t really hit it big yet, but have certainly attracted [...]
In the quest for alpha, investors pursue a wide variety of strategies designed to isolate stocks poised to deliver excess returns. While some investors rely on quant models for this endeavor, others use more descriptive characteristics to filter the universe of equities. One particular group of companies has a history of beating the market, but [...]
The rise of ETFs has led to the democratization of many asset classes which were once reserved for the ultra-rich. While investors have quickly adapted to ETFs offering exposure to commodities and quantitative strategies, another alternative asset has also seen a recent surge in popularity. Traditionally, hedge funds have been known for their ability to [...]
While most mutual fund firms shied away from ETFs initially, many have now seen the light, and are actively planning to finally enter into the ETF space. While the forays of Schwab, T. Rowe Price, and Goldman Sachs have received a great deal of media coverage, the ETF adventures of institutions best known for their [...]
With the tremendous rise of ETF investing has come the “democratization” of many asset classes previously out-of-reach to all but the biggest and richest individuals and institutions. One of the primary areas of growth in the ETF industry has been commodity products, which have continued to multiply and attract billions of dollars in assets. According [...]
