- Investor assets are shifting from mutual funds into ETFs. See this Financial Research Corp. study, April 13, 2009, via WSJ:
Consider this: for every $100 invested in 2001, $90 went into mutual funds, $8 went into index funds, and $2 went into ETFs. Fast-forward seven years: By the end of 2008, the share of mutual funds fell to around $81.5, while index funds attracted $9.5 and the remaining $9 went into ETFs.
- Investor interest is shifting from mutual funds to ETFs. See the Google Trends statistics, 2004-2008, via Rock the Boat Marketing:
Typically, search volume is believed to be a proxy for relevance. In that context, the decline in searches for “mutual funds” at a time when mutual fund news references (see second, smaller graph) were actually higher than in previous years is just something that could cause one to invoke Jeff Foxworthy–you know, the comedian who tracks “things that make you go Hmm.” ...As a P.S. but not to make a point because of course ETFs have been gaining awareness since 2004, I also ran an “ETFs” search. And noted the difference in the scale between the volume on the two search terms.
Check out the most recent comparison graph at Google Trends. - Investor advisors and financial planners favor ETFs. Check out the recent survey by Charles Schwab, via Forbes.com:
ETFs with their liquidity, transparency and cost efficiency are making their way to frontline investors. In fact, among a recent survey of Registered Investment Advisors by Charles Schwab, a full 79% say they now look to ETFs as their top investment vehicles for their clients.
- Investment in "alternatives" via ETFs is growing. Refer to the recent survey by Cerulli Associates via Financial-Planning.com:
“We found that if you look at practice types—wealth managers, those in wirehouses and RIAs (registered investment advisory firms)—they use alternatives.” More specifically, they are relying on a certain type of ETF—those that are invested in currencies and commodities, she said.
- The bottom line: ETFs outperform mutual funds. OK, this isn't a study, simply a logical analysis in the article "Boot Weak Mutual-Fund Managers For Solid ETFs" at WSJ.com:
"If you've got 100 managers all playing in the same sandbox, the index fund has to be in the top half because it has less expenses," [financial adviser Harold] Evensky [of Evensky & Katz in Coral Gables, Fla.] said. "And since the active managers in the top half don't stay there all the time, the index over time gradually moves up. [...] If I can be guaranteed funds that are always in the top half, that's pretty good," he added, "as opposed to trying to pick one that's going to be on top but may also end up on the bottom."