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S&P comments on concern over too many ETFs


Todd Rosenbluth, head of mutual fund and ETF research at S&P Global Market Intelligence, has commented on the age old issue of whether investors in ETFs should be concerned that there just too many offerings. 

Rosenbluth cites Investment Company Institute data, noting that ETFs have gathered USD246 billion in new money from September 30, 2015 to August 17, 2016, while mutual funds had USD191 billion of net outflows.  ETFs are winning apparently, in the quest for investor interest.
S&P Global Market Intelligence has research on 219 ETFs that launched since the end of August 2015 and is aware of filings from asset managers such as Fidelity to bring more to market, Rosenbluth says. “Many of the new ETFs and mutual funds have so far failed to gather interest from investors. In particular, many ETF providers rolled out currency hedged versions of their existing global or international equity products.”
The problem with ETFs with limited asset bases and trading volume is that they can have wide bid/ask spreads. Rosenbluth writes: “But if the dollar again is pressured, such products may resonate with investors seeking downside protection.”

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