Equity ETFs Blowing Away Mutual Funds: 2009 INFLOWS
According to Doug Sipkin, a senior brokerage analyst for Ticonderoga Securities, the advantages offered though ETFs are causing investors to switch from mutual funds at an astonishing rate. Doug compared the 2009 inflows to both products and found that there was $70 billion added to ETFs compared to $9 billion lost from Mutual funds. Doug notes that that was last year, amid all of the financial turmoil. What is the reason for the rush to ETFs? Doug believes it is the low fees, liquidity and transparency that investors are finding very appealing in ETFs.
Doug made an appearance on CNBC last night to discuss what all of this means to money managers. Doug feels that Blackrock (BLK) and State Street (STT) are set to benefit, while Legg Mason (LM) is at risk because it is largely a mutual fund company.
See Doug’s appearance on CNBC below: