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Trading in financial markets involves significant risk of loss which can exceed deposits and may not be suitable for all investors.
Before trading, please ensure that you fully understand the risks involved
Trading in financial markets involves significant risk of loss which can exceed deposits and may not be suitable for all investors. Before trading, please ensure that you fully understand the risks involved
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Tuesday, July 21, 2020

Opto Sessions: Deborah Fuhr on the popularity of ETFs

by Century Financial in Brainy Bull

Opto Sessions: Deborah Fuhr on the popularity...

Deborah Fuhr has been working with ETFs for decades. She is the founder and managing partner of ETFGI — an independent research and consultancy group that provides insights on the global ETF industry. Prior to launching the firm in 2012, she was head of ETF research and implementation at BlackRock and Barclays Global Investors. And before that, Fuhr was managing director and head of the investment strategy team at Morgan Stanley.

Fuhr says there are a number of reasons that ETFs have been seeing almost uninterrupted inflows in the past two decades.

“One would be that many investors — whether they're retail financial advisors, or professional institutional investors — have found that it is very challenging to find active mutual funds that are beating their benchmarks or delivering that alpha, as opposed to the market returns that people bought them expecting to receive,” she explains.

She says that “typically, seven out of 10 active funds are not beating their benchmark in a given year”, a percentage that increases when looking at shorter time frames. “Being able to overweight or underweight a country, sector or region allows you to potentially generate your own Alpha,” Fuhr explains.

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This isn't the only reason ETFs are so popular, though. Fuhr says that the most innovative providers in the space are now allowing people to invest across themes such as ESG or 5G technologies far more quickly than other investment services providers.

Finally, it’s the benefits ETFs offer that Fuhr says have solidified their status.

“They are cost-efficient and they’re also adding diversification for many investors,” Fuhr said. “They’re simple products that allow all types of investors to gain access to a broad toolbox, and they really are the only democratic investment product that I’m aware of.”

Source: This content has been produced by Opto trading intelligence for Century Financial and was originally published on cmcmarkets.com/en-gb/opto

Disclaimer: Past performance is not a reliable indicator of future results.

The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by Century Financial or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Century Financial does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and Century Financial shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

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