Boring is hot in the market for exchange-traded funds as demand for plain-vanilla products this year is driving record inflows. Nearly 75 cents of every new dollar invested in ETFs this year targeted the cheapest funds on the market, a trend that partially highlights investors’ urge to mimic major U.S. equity benchmarks that continue to […]
Roughly 75% of all exchange-traded fund inflows are heading to offerings investing in vanilla market-cap weighted indices. These products also represent the cheapest possible funds on the market. Through the end of September $333bn had made its way to US-domiciled ETF products, according to Morningstar. The US is a big market for ETFs, with $805bn-plus invested through them since mid-2014. Asset managers have been increasingly competing on price in the ETF space, with State Street Global Advisors and Franklin Templeton Investment among companies who have recently initiated fee cuts or introduced ultra-low-cost products.