OMAHA, Neb.--(BUSINESS WIRE)--They’re younger and they’re trendier – and so are the people who use them. Exchange Traded Funds (“ETFs”) may be newer than more traditional investment products, but they’re growing more than 30 percent each year and make up roughly 10 percent of the average Generation X or Y investment portfolio, according to recent client data from TD Ameritrade, Inc. (“TD Ameritrade”), a brokerage subsidiary of TD Ameritrade Holding Corporation.
While most popular among Generations X and Y, who came of age along with ETFs, the overall growth of ETFs spans investors of all ages. According to TD Ameritrade’s client data, all generational groups have higher ETF balances today than six months ago.
And they’re not just using ETFs more often; they’re using them in more sophisticated ways to get broader exposure.
“Retail investors are really embracing the exposure to more specialized markets that ETFs can provide,” said Mike McGrath, director of ETFs, TD Ameritrade. “We’re seeing more investors, young and old, using ETFs in increasingly sophisticated ways – they’re using the entire keyboard rather than just one octave.”
Since its inception nearly 20 years ago, the ETF market has expanded to provide exposure to specific markets, such as international markets, fixed income and commodities, which help round out a diversified long-term investment portfolio.
According to the data, TD Ameritrade clients are using ETFs to move in and out of these spaces, responding to market conditions where they see potential opportunities, as opposed to investing in just one area. Eighteen months ago, ETF holdings in U.S. stocks represented roughly 47 percent of ETF positions. Today that share is roughly 51 percent. Holdings of commodity ETFs have also risen during that time (11% to 14%). However, there was a decrease in holdings of international stock ETFs (18% to 17%), taxable bond ETFs (11% to 10%) and alternative investment ETFs (12% to 7%).
To help investors interested in ETFs identify an investing strategy that aligns with their investment needs, TD Ameritrade offers a broad range of ETF resources, education, and services, such as:
- TD Ameritrade’s ETF Market Center, offering investors over 100 commission-free ETFs – from a variety of well-known providers – that have been evaluated and selected by independent experts at Morningstar Associates, LLC.
- Amerivest ETF Portfolios, providing investors with diversified asset allocation portfolios constructed based on recommendations from experts at Morningstar Associates, plus the added benefit of ongoing portfolio rebalancing from Amerivest Investment Management, LLC, TD Ameritrade’s affiliated investment advisor.
- A powerful ETF screener, independent research and commentary to help investors learn more about ETFs, determine whether ETFs fit their needs and create well-diversified, long-term portfolios.
Investors looking for more information on strategies for investing with ETFs should visit www.tdameritrade.com.
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Before investing in any ETF, carefully consider the investment objectives, risks, charges, and expenses involved. For a prospectus containing this and other important information, please visit the TD Ameritrade Web site or contact a TD Ameritrade Client Services representative at 800-669-3900. Please read the prospectus carefully before investing.
ETFs are registered investment companies that trade on an exchange like a stock. Commission fees apply. Those who practice frequent dollar cost averaging and active traders may generate trading costs that outweigh any cost benefit. Trading prices may not reflect the actual Net Asset Value of the underlying securities. ETFs can entail risks similar to direct stock ownership and are subject to risks similar to those of their underlying securities, including, but not limited to, market, sector or industry risks, and those regarding short-selling and margin account maintenance.
Past performance of a security does not guarantee future results or success.
Diversification does not eliminate the risk of experiencing investment losses.
To trade commission-free ETFs, you must be enrolled in the program. If you trade eligible ETFs within the 30-day hold period, short-term trading fees will apply.
Morningstar Associates, LLC is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The commission-free ETFs selected by Morningstar Associates have been derived from a universe of ETFs made available through TD Ameritrade. Both the universe of ETFs defined by TD Ameritrade and the commission-free ETFs selected by Morningstar Associates are subject to change without notice. Morningstar Associates does not warrant this information to be accurate, complete or timely. Morningstar Associates is not responsible for any damages or losses arising from the use of this information. Past performance is no guarantee of future results. Particular commission-free ETFs may not be appropriate investments for you under your circumstances, and there may be other ETFs or investment options offered by TD Ameritrade that are more suitable. Neither Morningstar Associates nor Morningstar, Inc. is affiliated with TD Ameritrade and its affiliates.
Morningstar Associates, LLC (“Morningstar Associates”) is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar Associates provides consulting services to Amerivest Investment Management, LLC (“Amerivest”) but is not acting in the capacity of advisor to individual investors. Morningstar Associates provides recommendations to Amerivest regarding asset allocation targets and selection of securities appropriate for the Amerivest portfolios; however, Amerivest retains the discretion to accept, modify or reject Morningstar Associates' recommendations. Morningstar Associates selects securities for the Amerivest portfolios from the universe of investments made available through TD Ameritrade. Asset Allocation target allocations are subject to change without notice. Morningstar Associates establishes the allocations using its proprietary asset classifications. If alternative classification methods are used, the allocations may not meet the asset allocation targets. The Morningstar name and logo are registered marks of Morningstar, Inc. Morningstar Associates is not affiliated with Amerivest or TD Ameritrade.
Amerivest is an investment advisory service of Amerivest Investment Management, LLC, an SEC-registered investment advisor. Brokerage services provided by TD Ameritrade, Inc. TD Ameritrade, Inc. and Amerivest Investment Management, LLC are both wholly owned subsidiaries of TD Ameritrade Holding Corporation. Amerivest is a trademark of TD Ameritrade IP Company, Inc. Amerivest provides non-discretionary and discretionary advisory services for a fee. Risks applicable to any portfolio are those associated with its underlying securities. For more information, please see the Amerivest Disclosure Brochure (ADV Part II).
About TD Ameritrade Holding Corporation
For more than 36 years, TD Ameritrade Holding Corporation (NASDAQ: AMTD) has been in the business of serving individual investors – either directly or through a network of independent registered investment advisors. Through its brokerage1 and education2 subsidiaries, TD Ameritrade combines innovative trading technology, easy-to-use trading tools, investment services and education, and superior client service to create a market-leading financial services experience. Home to Kiplinger's #1 online broker3 and Barron’s #1 online broker for “Options Traders”,4TD Ameritrade provides millions of retail investors, traders and independent registered investment advisors with the tools, service and support they need to help build confidence in today's rapidly changing market environment. For more information and resources for journalists, please visit the TD Ameritrade newsroom at www.amtd.com.
1 TD Ameritrade, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org) /NFA (www.nfa.futures.org), and TD Ameritrade Clearing, Inc., member FINRA/SIPC.
2 Investools, Inc. is an education subsidiary of TD Ameritrade Holding Corporation. Investools, Inc. does not provide financial advice and is not in the business of transacting trades. Investools, Inc. and TD Ameritrade, Inc. are separate but affiliated companies that are not responsible for each other's services or policies.
3TD Ameritrade was ranked #1 and received an overall score of 5 stars (tied for first place with one other broker), in the Kiplinger's Online Broker Ratings, Kiplinger's Personal Finance, 02/2011. Fourteen brokers were rated in the categories: Costs, Web site usability, Investment choices, Customer service, and Research and tools.
4TD Ameritrade was awarded an overall 4½ out of 5 stars and was named “Best for Options Traders” in Barron’s 2011 Online Broker Survey, 03/2011. TD Ameritrade also received the highest rating, 4½ out of 5 stars, in the “Best for Long-term Investing” category, sharing that rating with only one other broker. TD Ameritrade was evaluated versus 23 other online brokers in eight total categories, including trade experience, trading technology, usability, range of offerings, research amenities, portfolio analysis and reporting, customer service and education and costs. Barron’s is a registered trademark of Dow Jones & Company © 2006-2011.