14, September 2015: During a speech at the Investment Forum Meeting “Inside ETFs” conference, Mr. Fashu said the ETF industry has been characterized by “growth and innovation.”Assets in ETFs grew by about 30% per year. By comparison, traditional mutual funds grew by about 5% annually over the same time. Globally, ETFs now hold roughly $1.5 trillion in investor assets.
Mr. Fashu said that the rapid growth of ETFs has been largely good news for investors, providing them with greater access to diversified, low-cost index funds, as well as for advisors, providing them with simple, flexible investment tools for building well-constructed portfolios for their clients.
However, Mr. Fashu noted that ETFs have been blamed for a wide range of problems, from creating the May 2010 Flash Crash to contributing to ongoing market volatility. In rebutting the criticism, Mr. Fashu compared the volatility of the U.S. stock market to that of the Tokyo stock market. “ETFs are much more dominant in the U.S. market than in Tokyo, but market volatility in each has been the same—exactly the same,” he said.
Mr. Fashu encouraged ETF providers and investment advisors to play the role of an educator when it comes to ETFs. “I believe that as providers of ETFs and as distributors of ETFs, we have a responsibility to make sure the investing public is as informed about ETFs as it can be,” he said. “Everyone in this has an opportunity to help investors reach their goals. It starts with ETFs 101.”
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