Migration from Mutual Funds to ETFs Continues
Investors continue to embrace exchange traded funds while dropping mutual funds from their portfolios.
That's the finding of the latest industry study by Cambridge, Massachusets-based Cogent Research.
According to Cogent, as of October 2010, 75% of investors own mutual funds, a figure that is down from 78% a year earlier and a full nineteen percentage points below the more than nine in ten (94%) of investors who owned at least one mutual fund in October of 2006. Meanwhile, within the same 4-year period, the proportion of investors who report owning ETFs has increased 57%, from 7% to 11%.
A Cogent representative commented that “Traditional mutual fund providers are fighting tooth and nail for a shrinking piece of real estate, while established ETF providers face a different challenge; fending off a rush of new providers in a rapidly expanding marketplace.”
The study also tested investor perceptions of ETF providers. Vanguard came out on top with a 52% strong positive impression. ETF managers iShares, PowerShares, Claymore/Guggenheim, PIMCO and Charles Schwab also had strong positive impressions with more than 40% of investors.
The Cogent Study is based on a nationallly representative sample of 4,000 investors with at least $100,000 in investable assets.