ETFs Making Their Way Into 401(k) Market

August 13,2010

ETFs continue to make headway in the 401(k) market as many 401(k) plans are starting to introduce them to their offerings as the advantages of ETFs become more and more apparent.

According to BlackRock, it is estimated that nearly $2 billion worth of iShares ETFs and ETNs have penetrated 401(k) plans.  BlackRock has openly stated that it plans on continuing its push of iShares products into the 401(k) market and feels that it will continue to gobble up market share in the near future. 

A second plan that is focusing on ETFs is ING’s ShareBuilder 401(k) plan, which is aimed at small businesses.  ShareBuilder offers 16 different ETFs and five ETF-based model portfolios for their clients to choose from.  The ETFs offered cover all major asset classes and are reviewed on an on-going basis to ensure effective expense ratios, market cap, volatility and other economic factors are intact with ShareBuilders investment philosophy. 

WisdomTree is another ETF provider who has actively and effectively marketed to the 401(k) marketplace.  WisdomTree currently delivers 52 different ETFs to the 401(k) marketplace and is focusing on small businesses with the intent to go after larger companies and corporations.

Overall, it is expected that ETFs constitute nearly $4 billion of all assets in 401(k) plans.  This is just a slither of the more than $1 trillion in 401(k) assets invested in mutual funds, but the trend is heading in the right direction.

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About etftutor
Kevin Grewal is the founder, editor and publisher of ETF Tutor and serves as the editor at www.SmartStops.net, where he focuses on mitigating risk and implementing exit strategies to preserve equity. Additionally, he is the editor at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Prior to this, Grewal was a quantitative analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor's degree from the University of California along with a MBA from the California State University, Fullerton. He is contributing author on The Street - his articles can also be found published on various sites including Yahoo! Finance, The Globe and Mail , Daily Markets, MSN Money, Seeking Alpha, Fidelity Investments, Traders Library, and Minyanville. Prior to this, Mr. Grewal was an analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds

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