ETF investors need more education
As the exchange-traded fund market swells towards an estimated $1 trillion of assets under management by 2009, managers are concerned that investors are still in the dark about the risks on investing in ETFs.
Rory Tobin, chief executive of iShares in Europe, said: “The European market is growing at a rapid rate. For investors, a critical question is whether they understand the key differences in the various ETFs being offered, most notably the differences in structure, cost, risk and return. For example, do investors understand the structural differences between swap based ETFs and physical based ETFs and are they aware of the various trade offs?
He added: "We are concerned that as the market evolves, the diversity of products on offer from other providers may not always reflect these values.”
Some banks and managers are expanding their presence in the ETF market as wealthy investors seek more transparency, but other firms are steering clear of the asset class.
On Monday Barclays Global Investors announced the hire of Deborah Fuhr, a seasoned ETF specialist from Morgan Stanley, for its newly created ETF research and implementation strategy team.
Morgan Stanley in June disbanded its investment strategies team, which under Debbie Fuhr published some of the most widely-read reports and data on the exchange-traded funds industry.
It is understood the team comprised four people alongside Fuhr.
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