At ThinkAdvisor’s virtual exchange-traded fund conference on Tuesday, a quick poll found that the vast majority of advisors now use some ETFs along with mutual funds and other vehicles in their client portfolios.
During the all-day live trade show, “ETFs: What Advisors Need to Know for Successful Portfolio Building,” 75.7% of several hundred attendees during the first of five panels reported that they now use ETFs with mutual funds and other investments. Only 6.6% reported that they use ETF-only client portfolios, and 17.8% said they don’t use ETFs at all in client portfolios but are considering them.
ThinkAdvisor editor Jamie Green, who moderated the first panel focused on the pros and cons of ETF investing, said that the ETF debate lives on, even though many advisors have become mainstream users of ETFs for their clients.
“Others aren’t fully convinced that they need ETFs at all,” Green said. “After all, index mutual funds have their own advantages, and many advisors are not interested in rapid trading of ETFs.”
Stepping forward to defend the use of ETFs in client portfolios was speaker Ron DeLegge (left), editor of ETFguide, who pointed out that ETFs now total $1.4 trillion under management, with 2008 being the only year in the last 10 years when the market hasn’t grown. In June 2013, assets decreased 4.0%, driven by a $15 billion drop in the international-emerging category.
DeLegge first went over the basics of ETFs, saying they offer the benefits of low expenses, trading flexibility and high tax efficiency, and they cover all major asset classes, including stocks, bonds, commodities, currencies and real estate.