The ETF Phenomena
February 1, 2016
In a recent article in South Florida Business & Wealth, WE’s Julie Neitzel discusses new tools for global investors. Over the past 20 years, technology has changed the way we live, providing modern conveniences such as cell phones, email, and the Internet. Similarly, the financial services sector has introduced innovative products that have changed the investment landscape as we once knew it.
Exchange-traded funds, or ETFs, are investment vehicles for holding securities that are passively managed and commonly owned by institutional, individual and hedge fund investors. This sector has experienced impressive growth in recent years, and ETF assets will likely surpass the $2.24 trillion hedge fund industry in the near future. Why the surge in popularity? ETFs are low cost, tax efficient, liquid and transparent in terms of underlying holdings. They also offer low investment minimums and efficiency in getting exposure to certain segments for a diversified investment portfolio.
Despite their appeal, not all ETFs are the same; today, there are over 1,600 ETFs providing different market exposures and risks. As with any investment vehicle, ETFs should be managed by an experienced professional who understands inherent investment risks.
To learn more about ETFs, click here.