What’s Next for ETFs in 2013?

January 17, 2013

Exchange traded funds (ETFs) continue to be the fastest growing area of the mutual fund industry. ETF assets hit a record high in 2012. What’s next for ETFs? While most ETFs are passively managed, there are more actively managed ETFs coming in 2013. Investors may also find more ETFs available without commissions at their broker.

ETFsMore Actively Managed ETFs
Many fund companies are adding actively managed ETFs. T. Rowe Price recently got SEC approval for a line of actively managed ETFs, and Fidelity is reportedly planning to launch actively managed ETF-versions of its popular Select funds. Fidelity Select ETFs would offer investors a cheaper way to access the Select funds since the funds are transaction-fee funds at most brokers. (Although investors usually pay a commission to buy and sell ETFs, this cost is usually lower than mutual fund transaction fees.)

With its SPDR series of ETFs, SSgA (State Street Global Advisors) is already a major ETF provider, but it is also looking into adding some actively managed ETFs to its existing index-based line-up. The new ETFs would focus on core growth, value, and risk-managed strategies.

More Commission-Free ETFs
Schwab aims to expand its list of commission-free ETFs
. Currently, Schwab’s commission-free ETF list only includes Schwab ETFs. According to Investment News, Schwab would like to include ETFs from Blackrock’s iShares, Vanguard and SPDR, but the ETF providers have balked at paying a fee to be included on Schwab’s commission-free ETF platform.

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