This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Schwab Study Finds 22% Rise In Demand For ETFs

Stocks in this article: SCHW

Fourth graph, second sentence of release should read: Schwab ETFs™, including the new Schwab Fundamental Index* ETFs, had $14.2 billion in assets as of September 30, 2013. (sted Schwab ETFs™, including the new Schwab Fundamental Index* ETFs, had $114.2 billion in assets as of September 30, 2013.).

The corrected release reads:

SCHWAB STUDY FINDS 22% RISE IN DEMAND FOR ETFS

Nearly One in Ten Investors Now Hold at Least 50 Percent of their Portfolios in ETFs

For a growing number of investors, exchange-traded funds (ETFs) are being embraced as a mainstay of a diversified portfolio. According to the 2013 ETF Investor Study by Charles Schwab, half of respondents plan to increase their ETF holdings over the next year – a 22 percent increase over those who said the same in 2012. Nearly one in ten investors (nine percent) now hold 50 percent or more of their portfolios in ETFs, more than double the four percent seen last year. Cost and fees continue to be critical factors when making ETF buying decisions, but topping expense ratios and trade commissions is the concern among investors that ETFs could contain hidden fees.

“Demand is up across the board, and investors who own ETFs appear to be more interested in the product than ever,” said Beth Flynn, vice president of ETF platform management at Charles Schwab. “We’re seeing less discussion of ‘if’ and more about ‘how’ investors will buy and use ETFs. We’re seeing an upward shift in sophistication among ETF investors, and a hunger to learn more.”

The 2013 ETF Investor Study by Charles Schwab is an online survey of more than 1,000 individual investors between the ages of 25-75 with at least $25,000 in investable assets and who have purchased ETFs in the past two years and/or are considering purchasing ETFs in the next two years. Similar surveys were conducted in 2012 and 2011, and certain questions were repeated in 2013 for benchmark purposes.

A leader in the retail ETF market, Charles Schwab had $179.3 billion in ETFs custodied on its platform as of September 30, 2013. Schwab ETFs™, including the new Schwab Fundamental Index* ETFs, had $14.2 billion in assets as of September 30, 2013.

Investors Prefer Transparency, Eager for Education

According to the study, investors have a strong reaction to lack of transparency when it comes to cost: 94 percent say understanding an ETF’s total cost is important. Interestingly, clarity about a fund’s redemption fees or other hidden fees is considered the #1 cost factor, with 71 percent saying it is extremely important. This ranks ahead of expense ratios at 61 percent and trade commissions at 54 percent.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs