“We’re starting to see investorsbecome more comfortable using ESGfunds as core products,” said ToddRosenbluth, senior director of ETF andmutual fund research at CFRA.
He cites two ESG-focused S&P 500ETFs — Xtrackers SNPE and State StreetGlobal Advisors’ EFIV — which haveeach outperformed the S&P 500 year-to-date.
That would be an understatementfor ARK Investment Management’sactive ETFs, which focus on different disruptive technologies. ItsGenomic Revolution ETF (ARKG), NextGeneration Internet ETF (ARKW) andInnovation ETF (ARKK) have eachgained at least 150% through Dec. 28.
Rosenbluth expects to see continu-
ing demand for clean energy ETFs such
as TAN [Invesco’s Solar ETF], which
has more than tripled in price this year,
as the incoming Biden Administration
focuses on fighting climate change.
He also foresees other thematic ETFscoming to market, ones “that can fit inwith a slightly more normal environment as coronavirus vaccines are given.”
4. FEE CUTS
As in many previous years, 2021 is
expected to be a year of declining ETF
fees. “We will continue to see fee pres-
sures,” said Johnson. “There are still
some basis points [to cut] out there.”
The four ETFs are the iShares Core
MSCI Emerging Markets ETF (IEMG),
0-5 Year TIPS Bond ETF (STIP), Core
International Aggregate Bond ETF
(IAGG) and International Dividend
Growth ETF (IGRO).
A Work-From-Home Shift in
the ETF Industry
In an astonishingly short time start- ing in March, vast segments of the U.S. economy shifted from workingin offices to working remotely.
A new study by Direxion, which provides leveraged and thematic ETFs,and ETF Trends, a source of industrycoverage, explored various aspects ofworking remotely during the pandemicand how the new work environmenthas affected financial advisors and theETF industry.
The survey also provided a better understanding of the long-termeffects of this secular shift on theadvisor market.
The survey was conducted Sept. 25
through Oct. 28 among 2,169 respon-
dents, the majority describing them-
selves as either asset gatherers or
portfolio managers; 55% said their cli-
ent portfolios are 1% to 40% ETFs;
and another 35% said that they use
ETFs for more than 40% of their cli-
ent assets.
Although most advisors did not workremotely before the coronavirus outbreak in the U.S., 83% of survey participants said they would like to work atleast one day a week from home permanently. Forty-three percent would liketo work at least three days a week fromhome permanently.
Sixty-four percent of advisors reported that their relationships with clientshad not changed after they startedworking from home, and 18% said theirclient relationships had strengthened.
Advisors have been talking to theirclients more, the survey found. Seventypercent reported increasing their use ofvideo, and 60% said they simply pickedup the phone to stay in touch.
Some three-quarters of those surveyed said their work-from-home productivity was good or excellent.
In their work, 52% of surveyed advisors said they trusted industry websites as their primary source for ETFresearch. Eighty-five percent reportedthat they had attended a virtual event,and 45% said they had increased theirreliance on webcasts.
ETF Trends’ Dave Nadig said in a
statement, “With the majority of the
industry working from home, these
findings are vital to the reopening,
management and marketing strategies
for firms moving into the new year.
“The pandemic has accelerated
already existing trends in the advisor
business and it shows, with 45% of
advisors stating they’ve increased their
usage of ETF issuer webcasts. Without
any major changes on the horizon, we
anticipate the ETF and advisor markets
to continue their migration to digital
distribution over the next year.”
“We were curious to see how it
was affecting the advisory business as
well,” Nestor said. “The results from
the survey clearly show that advisors
are being incredibly effective in this
changed environment, and leaning in
to the tools and resources that help
them do their job without going to
the office.”
Bernice Napach can be reached at bnapach@alm.com. Michael S. Fischer can be reached atmsf7@columbia.edu.
