Led by the iShares exchange traded fund group, exchange traded funds are poised to break the stranglehold that mutual funds have on 401(k) retirement plans
The San Francisco-based unit of Barclays Global Investors launched the “iShares in 401(k)” program last month to help financial advisers use ETFs as investment options within 401(k) retirement plans.
The program identifies administrative providers and networks that offer access to ETFs in 401(k) accounts, making it easier for advisers to provide the funds in clients’ retirement programs alongside traditional mutual funds.
The timing seems right.
The Euro’s Demise Has Been Set in Motion: Are you protected?
"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."
CLICK HERE to get your Free E-Book, “Why It’s Curtains for the Euro”
The massive losses in 401(k) plans — losses that can be attributed to mutual funds that in many cases are more expensive than ETFs — work to the advantage of ETFs, said Darek Wojnar, head of product research and strategy at iShares.
And more 401(k) administrators and networks have cleared the technical hurdles of buying and selling ETFs and are making room for the products.
“The record keepers have figured out ETFs are coming and they need to accommodate them,” said Bruce Levine, president of ETF provider WisdomTree Investments of New York.
WisdomTree rolled out its own ETF 401(k) platform in 2007.
With assets of $25 million spread among 10 plans, Mr. Levine admitted that it has been “slow going.”
Industrywide, ETFs account for less than 5% of the assets in 401(k) plans, Mr. Wojnar said.
Full Story: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090510/REG/305109977/1025/ETF
Most Comments