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Searching for Investments

Posted by Michael Venuto on Sep 23, 2020 10:30:00 AM
Michael Venuto
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This week, we look at the most searched financial terms of 2020. Given the ETF market’s growth, especially relative to Mutual Funds, it is surprising to see that the individual investor is focused on more practical searches. This highlights two important themes which we have often covered in our ETF Think Tank Research:

  1. The ETF structure is just a wrapper; a more efficient vehicle for delivering investment exposures.
  2. Investors are concerned with real world problems; advisors must guide them to solutions. The ETF structure is just a great lure in the tacklebox to help advisors solve investors’ challenges.

It is interesting to see massive growth within our ETF Ecosystem in this very volatile 2020.

Nate Geraci noted the flows have been quite strong, which goes against what most financial media expected:

 
What are Investors Searching for?

In mid-2019, primary searches among investors had little to do with investing. Here are the top 7 financial-term searches by state:

image02-Sep-22-2020-04-33-42-32-PM

The terms below don’t reference Mutual Funds or ETFs:

  • Income Taxes
  • Insurance
  • Mortgage
  • College
  • Estate Planning
  • Retirement
  • Child Care

 

The key here is not to get lost in the details of delivery; advisors should focus on the challenges posed by clients. The ETF is just a more efficient wrapper to deliver solutions on these concerns. The ETF Think Tank refers to these benefits as “client alignment growth factors,” meaning ETFs help solve investors’ concerns with better relation to Mutual Funds.

  • Transparency
  • Liquidity
  • Tax Efficiency
  • Lower Cost

 

What Changed in 2020?

For passive ETF investors, we have warned multiple times about the impact of the pandemic on index investing.

image03-Sep-22-2020-04-33-42-19-PM

The mindset of individual investors also changed in 2020. We have seen a Robinhood effect fueled by Barstool Sports. This article shows the search appetite for investors in 2020. This is more specific, but ETFs still don’t come to the top; bottom fishing in oil stocks seems to be very popular in some states.

image04-Sep-22-2020-04-33-42-24-PM

 

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