Is there a battle royal brewing in the world of investment funds? Exchange-traded funds are suiting up in the locker room, preparing to challenge mutual funds' dominance. A recent report from Deloitte, Exchange-Traded Funds: Challenging the Dominance of Mutual Funds? says that ETFs could in time bulk up with some of the serious monetary muscle we call market share.
ETFs have become popular with investors due to their fee structure, tax efficiency and level of transparency, says Craig Stier, U.S. leader of Deloitte Asset Management Services Practice and author of the paper. They have also made it easier for retail investors to invest in individual commodities like oil and gold. "These are some reasons perhaps why ETFs have weathered the sharp slowdown in markets better than mutual funds," says Stier.