ETFs are slowly penetrating the US 401(k) market but there is a large part of it which is left untapped by the funds. Helen Fowler looks at the current use of ETFs in the retirement plans and what can be done by the industry to expand their slice of the market
The 401(k) US retirement market represents a lucrative opportunity for providers to sell exchange-traded funds – its assets total around $1trn. But, so far at least, ETFs have barely penetrated the vast market, despite their low costs, transparency and accessibility. “We really haven’t seen increased use of ETFs in 401(k) plans,” said Amy Labanowski, US-based principal at investment consultancy Mercer. “We don’t generally see plan sponsors wanting to add ETFs to the core offering.” Despite the ETF industry boasting nearly $1.5trn in global assets, according to data from BlackRock, ...
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