Who’s leading the charge behind mutual fund and ETF investments? The answer is none other than independent broker-dealers (IBDs).
During the third quarter, IBDs led third-party distribution of funds by accounting for $1.9 trillion in both long-term mutual fund and ETF assets under management, according to Strategic Insight.
While the independent channels continue to drive overall growth, the use of products varies by type of firm. IBDs continue to show a preference for mutual funds, while RIAs utilize funds and ETFs more evenly,” said Frank Polefrone, senior vice president, Access Data, Broadridge.
The IBD channel favored long-term mutual funds with a $241 billion increase, representing 91% of 2013 YTD growth, versus just $24 billion, or 9% for ETFs. By comparison, the RIA channel growth was more balanced with a $99 billion increase in long-term mutual funds YTD, representing 65% of the growth in the RIA channel, versus a $53 billion increase, or 35% for ETFs. Wirehouse firms were similar to IBDs with the majority of the increase coming from long-term funds over ETFs, $115 billion to $36 billion, respectively.