ETFs Making Their Way Into 401(k) Market
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.