“The exchange traded fund (ETF) industry is BOOMING…”
That’s what Palm Beach Letter Chief Analyst Grant Wasylik just told me. I’d asked about the 8th annual “Inside ETFs” conference he attended last month.
[An exchange traded fund, or ETF, is a special type of security. It tracks an index, a commodity, or a basket of assets like an index fund… but trades like a stock on an exchange. As you’ll see below, ETFs are witnessing explosive growth.]
Grant attended speeches from financial titans like “bond king” Jeffrey Gundlach and Dennis Gartman (founder of The Gartman Letter). He also had private discussions with investment industry heavyweights like Rob Arnott (the “Father of Fundamental Indexing”) and Joe Davis (Vanguard’s chief economist).
Now, Grant could qualify as an ETF expert, himself. He’s traded them at the institutional level… he’s been responsible for making them a part of a billion-dollar-plus private wealth manager’s asset allocation model… and he has multiple contacts in every ETF family in the business. He also uses them in his own IRA.
So I wanted to share Grant’s top insights from the world’s largest ETF conference with all Daily readers. Here’s what he wrote:
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With over 1,600 ETFs and $2 trillion in assets, the ETF industry is rapidly growing. $240 billion flowed into ETFs in 2014. |
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Institutions and financial advisors are flocking to ETFs. Mutual funds and hedge funds are seeing outflows. |
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Why are ETFs attractive to investors? Low costs, tax efficiency, intraday trading, and their returns beat most active managers (85% of actively managed funds underperformed their corresponding index last year). |
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ETF assets ($2 trillion) will surpass mutual fund assets (about $15 trillion) by 2024. That’s explosive growth (see below). |
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ETFs are flattening the investment landscape. Their super-low costs, decreasing commissions, and advanced technology mean you should never be paying high costs when investing again. |
Bottom Line: Why an investor would give 2% of their assets and 20% of any gains to underperforming hedge fund managers is beyond me. ETF investors enjoy greater diversification, lower fees, and higher returns than actively managed funds. The rapid rise of the ETF industry is altering the investment landscape for the better.
The Palm Beach Letter just recommended a one-of-a-kind ETF this month. You won’t read about this particular type of ETF in any other newsletter. If you haven’t read the February issue, do so now… because Tom and Grant’s wildly popular recommendation is already getting close to its buy-up-to price.