There is $5 trillion in Exchange traded funds. About 75% is in actively managed funds but passive index funds are growing and will be about one-third of the ETF market around 2021.
ETFs are sometimes used as substitute for futures and investors can use passive ETFs to implement active strategies.
Exchange traded funds are marketable securities that track an index, commodity, bonds or assets. They can be traded like a stock.
ETF have lower costs
ETFs have a reputation for lower costs than traditional mutual funds. They have a low expense ratio. An index fund is much simpler to run. Index funds do not need security selection. Mutual funds can charge 1% to 3% every year for expenses. Index fund expense ratios and ETFs are usually less than 1%.
Asian institutions outside Japan and Australia often prefer US or European ETFs to their less liquid Asian counterparts. Chinese firms manage over $7.5 trillion. $1.3 trillion is in mutual funds. ETFs are only 3% of the Chinese financial portfolios.
ETFs are usually more tax efficient than Mutual funds.
ETFs do not have sales load.
Bitcoin ETF’s would be important to get around wallet and other hassles for investors
It is believed there would be a Bitcoin rally if regulators approved Bitcoin ETF’s. The reason is that it would no longer be so difficult to start or increase investments in cryptocurrency trading. Currently the wallets for cryptocurrency are difficult to use and secure. There is often the need for physical devices to secure cryptocurrency accounts.
Any approved Bitcoin ETFs would need to be adopted by Vanguard and Fidelity and other major financial companies to allow investors to have the promise of click of a button investing in crypocurrency.
