Yesterday's missive from InvestmentNews contained a short item on investors' relative levels of awareness of exchange-traded funds. The headline finding is that self-directed investors possess more knowledge of ETFs and ETF providers than do advised investors.
Two explanations seem obvious. First, advised investors are less likely to have extensive knowledge of insider-ish facts like which bank owns which family of ETFs for the same reason they're advised in the first place: They don't want or need to know such things. Second, even if they would want to know (if they knew there was something to know), many advised investors are advised by financial services types who don't/won't bring ETFs to the table because they (the financial services types) don't/won't get paid to do so. Instead, they bring mutual funds with sales loads, insurance products with big fat commissions, and managed accounts with generous revenue-sharing arrangements.
Of course there are plenty of exceptions, fee-based or (better yet) fee-only advisors who suffer no conflict of interest in brigning low-cost ETFs to their clients. But on the margin, for the product-pushers, ETFs just don't add up...and many of their clients are still in the dark.
Then there's this. In a piece on awareness, InvestmentNews blows the most basic fact in the ETF universe:
Which is great, but for the fact that Barclays runs (and might need to dump!) the iShares family of ETFs, not ProShares.
Jamie Burns, "Advised investors less aware of ETFs than self-directed peers," InvestmentNews, March 17, 2009
Sree Vidya Bhaktavatsalam, "Barclays Seeks Sale of iShares as ETF Assets Decline," Bloomberg, March 17, 2009