After a rush of activity over the last five years, CUSOs that offer exchange-traded funds might see a slowdown in growth over the next four years.
According to Financial Research Corp.'s new mid-year 2010 ETF review, ETF assets are expected to achieve an annual growth rate of nearly 19% between 2010 and 2014, which is a somewhat slower pace than the 23% annual growth rate over the last five years.
In its study, FRC found that the trading influence of ETFs, lower fees, and tax efficiency relative to mutual funds, as well as expected wider adoption by institutional and financial advisors, will drive ETF growth. Findings in the study are based on an analysis of FRC's IMPACT database of fund assets and net sales, third-party research, and publicly released industry white papers.
ETFs are building a presence within the credit union industry. In 2008, CUSO Financial Services LP added an asset management suite that includes ETFs. That same year, MEMBERS Trust Co. was the only credit union entity to earn a spot in Barclays Global Investors iShares' inaugural ETF Managed Solutions Guide for its innovation with ETFs.
An ETF is an investment vehicle traded on stock exchanges like stocks, according to commodityonline.com. The fund holds assets such as stocks, bonds or commodities and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day.