Page 18 - Investment Advisor - Jan/Feb 2021

ETF ADVISOR

“We’re starting to see investors focuses on fighting climate change. Advisors have been talking to their
become more comfortable using ESG He also foresees other thematic ETFs clients more, the survey found. Seventy
funds as core products,” said Todd coming to market, ones “that can fit in percent reported increasing their use of
Rosenbluth, senior director of ETF and with a slightly more normal environ- video, and 60% said they simply picked
mutual fund research at CFRA. ment as coronavirus vaccines are given.” up the phone to stay in touch.
He cites two ESG-focused S&P 500 Some three-quarters of those sur-
ETFs — Xtrackers SNPE and State Street 4. FEE CUTS veyed said their work-from-home pro-
Global Advisors’ EFIV — which have As in many previous years, 2021 is ductivity was good or excellent.
each outperformed the S&P 500 year- expected to be a year of declining ETF In their work, 52% of surveyed advi-
to-date. fees. “We will continue to see fee pres- sors said they trusted industry web-
That would be an understatement sures,” said Johnson. “There are still sites as their primary source for ETF
for ARK Investment Management’s some basis points [to cut] out there.” research. Eighty-five percent reported
active ETFs, which focus on dif- Even before the end of 2020, that they had attended a virtual event,
ferent disruptive technologies. Its BlackRock announced fee cuts in four and 45% said they had increased their
Genomic Revolution ETF (ARKG), Next passive iShares ETFs ranging from reliance on webcasts.
Generation Internet ETF (ARKW) and one to seven basis points, effective ETF Trends’ Dave Nadig said in a
Innovation ETF (ARKK) have each Dec. 17. statement, “With the majority of the
gained at least 150% through Dec. 28. The four ETFs are the iShares Core industry working from home, these
Rosenbluth expects to see continu- MSCI Emerging Markets ETF (IEMG), findings are vital to the reopening,
ing demand for clean energy ETFs such 0-5 Year TIPS Bond ETF (STIP), Core management and marketing strategies
as TAN [Invesco’s Solar ETF], which International Aggregate Bond ETF for firms moving into the new year.
has more than tripled in price this year, (IAGG) and International Dividend “The pandemic has accelerated
as the incoming Biden Administration Growth ETF (IGRO). already existing trends in the advisor
business and it shows, with 45% of
advisors stating they’ve increased their
A Work-From-Home Shift in usage of ETF issuer webcasts. Without
any major changes on the horizon, we
the ETF Industry anticipate the ETF and advisor markets
to continue their migration to digital
distribution over the next year.”
n an astonishingly short time start- selves as either asset gatherers or Direxion President Rob Nestor
ing in March, vast segments of the portfolio managers; 55% said their cli- recalled that the trend prompted his
IU.S. economy shifted from working ent portfolios are 1% to 40% ETFs; business to build new products to take
in offices to working remotely. and another 35% said that they use advantage of the shift. Direxion rolled
A new study by Direxion, which pro- ETFs for more than 40% of their cli- out the Work From Home ETF earlier
vides leveraged and thematic ETFs, ent assets. this year.
and ETF Trends, a source of industry Although most advisors did not work “We were curious to see how it
coverage, explored various aspects of remotely before the coronavirus out- was affecting the advisory business as
working remotely during the pandemic break in the U.S., 83% of survey par- well,” Nestor said. “The results from
and how the new work environment ticipants said they would like to work at the survey clearly show that advisors
has affected financial advisors and the least one day a week from home perma- are being incredibly effective in this
ETF industry. nently. Forty-three percent would like changed environment, and leaning in
The survey also provided a bet- to work at least three days a week from to the tools and resources that help
ter understanding of the long-term home permanently. them do their job without going to
effects of this secular shift on the Sixty-four percent of advisors report- the office.”
advisor market. ed that their relationships with clients
The survey was conducted Sept. 25 had not changed after they started Bernice Napach can be reached at bnapach@
through Oct. 28 among 2,169 respon- working from home, and 18% said their alm.com. Michael S. Fischer can be reached at
dents, the majority describing them- client relationships had strengthened. [email protected].

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