Brokerage powerhouses are increasingly promoting new approaches for investors to access low-cost exchange-traded funds as an alternative to ordinary mutual funds, The Wall Street Journal reports.
The bumper crop of brokerage-driven ETF services aims to capitalize on retail investors growing appetites for inexpensive investments. At the same time, competition among ETF distributors is heating up, with an influx of new technology designed to simplify the process of investing in ETFs.
Ameritrade Holding Corp , E*Trade Financial Corp , Morgan Stanley and A.G. Edwards are separately ramping up programs to help individual investors build diversified ETF portfolios and in some cases provide in-depth research on dozens of ETFs.
For example, Ameritrades newly launched Amerivest service combines risk-tolerance and portfolio building applications, competing with E*Trades ETF Center, a Web-based research facility offering investment profiles and selection tools for approximately 158 ETFs. Investors seeking professional management can find ETFs in A.G. Edwards Allocation Advisors program, while Morgan Stanley is finalizing plans to incorporate ETFS into its fee-based managed accounts program.
Assets invested in ETFs at Merrill Lynch doubled from last year to nearly $9 billion. Roughly 60% of the growth in the asset class occurred in Barclays Global Investors ETFs, formally known as iShares. The ETF industry in August ballooned to $174.5 billion, a 14% jump from July, according to the Investment Company Institute .