June 6, 2011, 6:00 PM
Professionals shifting to ETFs from mutual funds.
Exchange traded funds (ETFs) have made a big impact on the investment arena in the past few years, pulling assets from mutual funds and other investment vehicles too. Regular investors are using ETFs, however I believe professional investors have probably shifted more assets to ETFs than regular investors have. I also believe this trend will continue.
Tom Lauricella at the Wall Street Journal penned a piece showing the relative fortunes of stock ETFs versus stock mutual funds [emphasis added]:
Since March 2009, when U.S. stock markets hit their lows, investors have pumped $57 billion into ETFs holding U.S. stocks. U.S.-stock mutual funds over the same period have suffered withdrawals of $66 billion, according to Morningstar Inc.
In all, investors today around the globe have a total of $1.4 trillion invested in some 3,500 exchange-traded portfolios, according to BlackRock Inc.