ETFs on the Rise: A Look at Growth Momentum and Future Prospects

The market for global assets and ETFs reached a new record of $12.4 trillion by the end of the third quarter, according to Morningstar. A report by Charles Schwab indicates that 65% of investors plan to increase their ETF investments over the next five years. David Botset, Head of Innovation and Administration at Schwab Asset Management, recently spoke about the growth of ETFs at Wealth!. He emphasized that ETF investors are very confident in their decisions, which explains a significant portion of this year's inflows. Many investors are repositioning in the fixed income sector as the Federal Reserve has initiated its cycle of interest rate cuts. ETFs are also being used to hedge against market volatility risks. They are considered a cost-effective investment option. Botset highlights that the most important factor when choosing ETFs is cost. Investors are looking not only for ways to diversify their portfolios but also to reduce investment costs. Millennials, in particular, show a greater inclination towards using ETFs, while older generations tend to stay with mutual funds. The appeal of ETFs to younger investors, according to Botset, is due to their cost efficiency and easy market access.