The ETF industry has grown quite significantly; in 1997, there were 19 ETFs, and today there are over 1,700, according to data by Tiburon Strategic Advisors. Assets in ETFs have grown from less than $1 billion in 1993 to $2.4 trillion this year; this market is capturing some $250 billion per year in flows.
But Chip Roame, managing partner at Tiburon, believes this industry is now getting more interesting.
“I think it’s now getting more interesting about who’s using ETFs—both at the consumer level, at the advisor level, etc. and where the ETF industry is headed,” he said.
Roame expects the passive ETF space to continue to proliferate; the active ETF market—which is still embryonic—will have stagnate to moderate growth at best, he predicts.
Here, we highlight five reasons advisors should continue to watch the ETF market.