2012 was a big year for ETFs and the year also set up megatrends for the products that will manifest themselves in 2013. Here’s a list of five that will get you thinking about possible ways to use ETFs for your clients.
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1. Bigger firms will begin creating ETF indexes. Smaller firms like Wisdom Tree and IndexIQ have been creating their own customized indexes. Now, bigger firms are following suit.
2. As with hedge funds, mutual funds are now planning to enter the ETF market. There was a lot of filing activity with the SEC during the last months of 2012.
3. Active ETFs will command more of the spotlight. You can expect them to attract some of the money that has traditionally been invested in their passive ETF counterparts.
4. ETFs will be entering the retirement plan scene. Fiduciaries managing the plans could be banks, insurance companies, or registered investment advisors (RIAs).
5. ETF fees and expense ratios will continue to be slashed. The entrance of the commission-free ETF is intensifying this.
You can find more detailed summaries about these trends here