TD Ameritrade Retail Investors Embrace ETFs & Exposure to More Specialized Markets
OMAHA, Neb.--(BUSINESS WIRE)-- Retail investors are embracing ETFs and the exposure they can provide to more specialized markets, according to recent client data from TD Ameritrade, Inc. ("TD Ameritrade"), a brokerage subsidiary of TD Ameritrade Holding Corporation.
Close to 30 percent of ETF holdings among TD Ameritrade retail clients provide exposure to commodities and alternatives. Around 45 percent of ETF holdings provide exposure to US equities, about 15 percent provide international equity exposure and bond ETFs make up 10 percent of ETF positions.
"Over the past five years, our retail client ETF holdings have more than doubled," said Lule Demmissie, managing director of investment products and retirement, TD Ameritrade. "And, more than ever, we're seeing investors take advantage of the exposure to more specialized markets that ETFs can provide. More investors, young and old, are using ETFs in increasingly sophisticated ways."
There is a correlation between age and the likelihood of having ETFs in a portfolio, and a slight difference in what type of ETFs might be held:
12.7% of assets are held in ETFs, and more likely than other age groups to hold international ETFs
11.3% of assets are held in ETFs
8.6% of assets are held in ETFs
7.3% of assets are held in ETFs, less likely to hold US stock ETFs; and more likely to hold bond and metals ETFs
6.2% of assets held in ETFs, even less likely to hold US stock ETFs; and even more likely to hold bond and metals ETFs
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, while having unique risks, can help round out a diversified long-term investment portfolio, and investors are increasingly taking advantage of the possibilities.
This evolution and the demand from clients was the impetus for TD Ameritrade to, in 2010, create the first-ever commission-free ETF list with more than 100 ETFs, objectively selected by investment experts at Morningstar Associates, LLC, a registered investment advisor and unit of Morningstar. The list is made up of a wide selection of ETFs from among the largest and most well-known issuers of ETFs in today's market. TD Ameritrade receives no special compensation or fees from any of the ETF providers included on the list.
"When we set out to develop a better commission-free offering, our goal was to help investors build long-term portfolios more cost effectively while staying true to our core philosophy of doing the right thing for the client," Demmissie continued. "That's what we did back when we launched our game-changing commission-free ETF list, so our clients can be confident that the funds were selected based on what's important to investors - a broad and diverse group of quality ETFs."
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade's (NYS: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how - bringing Wall Street to Main Street for more than 36 years. TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade's newsroom or www.amtd.com for more information.
About Morningstar Associates, LLC
Morningstar Associates, LLC is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. It is part of the Morningstar Investment Management division, which creates custom investment solutions that combine award-winning research and global resources with proprietary Morningstar data. With approximately $149 billion in assets under advisement and management*, the Morningstar Investment Management division provides comprehensive retirement, investment advisory, and portfolio management services for financial institutions, plan sponsors, and advisors around the world.
*Data as of Dec. 31, 2012. Includes Morningstar Associates, Ibbotson Associates, Morningstar Investment Services, OBSR Advisory Services, and Ibbotson Australia.
Carefully consider the investment objectives, risks, charges and expenses before investing. A prospectus, obtained by calling 800-669-3900, contains this and other important information about an investment company. Read carefully before investing.
To trade commission-free ETFs, you must be enrolled in the program. Eligible ETFs purchased commission-free must be held for at least 30 days. If you sell an ETF within 30 days of being purchased commission-free, a short-term trading fee will apply.
The commission-free ETFs selected by Morningstar Associates have been derived from a universe of ETFs made available through TD Ameritrade, a universe which does not include all ETFs available in the marketplace. Both the universe of ETFs defined by TD Ameritrade and the commission-free ETFs selected by Morningstar Associates are subject to change at any time and 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. Morningstar Associates may have more favorable opinions of certain ETFs which are not included in the universe of ETFs made available through TD Ameritrade. The Morningstar selections were based on qualitative factors and quantitative analysis conducted by Morningstar Associates. Neither Morningstar Associates nor Morningstar, Inc. is affiliated with TD Ameritrade and its affiliates. Morningstar, the Morningstar logo, Morningstar.com, Morningstar Tools are either trademark or service marks of Morningstar, Inc.
ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks. Some ETFs may involve international risk, currency risk, commodity risk, and interest rate risk. Trading prices may not reflect the net asset value of the underlying securities. Commission fees typically apply.
Commodity ETFs may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity. Commodity ETFs may be subject to greater volatility than traditional ETFs and may not be suitable for all investors. Unique risk factors of a commodity fund may include, but are not limited to the fund's use of aggressive investment techniques such as derivatives, options, forward contracts, correlation or inverse correlation, market price variance risk and leverage.
Investments in bond ETFs are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Bonds and bond funds will typically decrease in value as interest rates rise.
Past performance does not guarantee future results or success.
Asset allocation and diversification do not eliminate the risk of experiencing investment losses.
International investments involve special risks, including currency fluctuations and political and economic instability.
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Christina Goethe, 201-369-8541
Communications & Public Affairs
Jeff Goeser, 402-597-8464
Investor Relations & Finance
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