Financial advisers have fueled the exchange-traded fund structure's growth, and those advisers have become increasingly comfortable with ETFs — including fixed-income ETFs — as the funds have shown their ability to weather market challenges, a Cerulli Associates analyst said during a webinar Wednesday.
For ETF issuers, "absolutely tremendous" opportunity exists, said Daniil Shapiro, associate director, product development, during the webinar, titled "U.S. Investment Vehicles: Innovation and Opportunity," which was hosted by the independent research and consulting firm.
"The growth of the ETF structure really comes down to its greater uptake by advisers," Mr. Shapiro said, adding that as advisers shift to fee-based practices, every year they are allocating a bigger and bigger portion of their portfolio assets to ETFs.
And, as ETFs have faced different market challenges, they have continued to attract additional adviser support, he said.
"In March 2020, when there was a significant drawdown, advisers were very concerned about fixed-income ETF liquidity, but the structure was able to prove itself through the crisis," Mr. Shapiro said. "And now, in 2022, you have advisers that are far more comfortable using these fixed-income ETFs (and) you have different fixed-income ETF issuers coming to market."