TD Ameritrade Retail Investors Embrace ETFs & Exposure to More Specialized
OMAHA, Neb. -- March 25, 2013
Retail investors are embracing ETFs and the exposure they can provide to more
specialized markets, according to recent client data from TD Ameritrade, Inc.
(“TD Ameritrade”), a brokerage subsidiary of TD Ameritrade Holding
Close to 30 percent of ETF holdings among TD Ameritrade retail clients provide
exposure to commodities and alternatives. Around 45 percent of ETF holdings
provide exposure to US equities, about 15 percent provide international equity
exposure and bond ETFs make up 10 percent of ETF positions.
“Over the past five years, our retail client ETF holdings have more than
doubled,” said Lule Demmissie, managing director of investment products and
retirement, TD Ameritrade. “And, more than ever, we’re seeing investors take
advantage of the exposure to more specialized markets that ETFs can provide.
More investors, young and old, are using ETFs in increasingly sophisticated
There is a correlation between age and the likelihood of having ETFs in a
portfolio, and a slight difference in what type of ETFs might be held:
Age 26-35 12.7% of assets are held in ETFs, and more likely than other
age groups to hold international ETFs
Age 36-45 11.3% of assets are held in ETFs
Age 46-55 8.6% of assets are held in ETFs
Age 56-65 7.3% of assets are held in ETFs, less likely to hold US stock
ETFs; and more likely to hold bond and metals ETFs
Age 66-75 6.2% of assets held in ETFs, even less likely to hold US stock
ETFs; and even more likely to hold bond and metals ETFs
Since its inception nearly 20 years ago, the ETF market has expanded to
provide exposure to specific markets, such as international markets, fixed
income and commodities, which, while having unique risks, can help round out a
diversified long-term investment portfolio, and investors are increasingly
taking advantage of the possibilities.
This evolution and the demand from clients was the impetus for TD Ameritrade
to, in 2010, create the first-ever commission-free ETF list with more than 100
ETFs, objectively selected by investment experts at Morningstar Associates,
LLC, a registered investment advisor and unit of Morningstar. The list is made
up of a wide selection of ETFs from among the largest and most well-known
issuers of ETFs in today’s market. TD Ameritrade receives no special
compensation or fees from any of the ETF providers included on the list.
“When we set out to develop a better commission-free offering, our goal was to
help investors build long-term portfolios more cost effectively while staying
true to our core philosophy of doing the right thing for the client,”
Demmissie continued. “That’s what we did back when we launched our
game-changing commission-free ETF list, so our clients can be confident that
the funds were selected based on what’s important to investors – a broad and
diverse group of quality ETFs.”
About TDAmeritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs)
have turned to TD Ameritrade's (NYSE: AMTD) technology, people and education
to help make investing and trading easier to understand and do. Online or over
the phone. In a branch or with an independent RIA. First-timer or
sophisticated trader. Our clients want to take control, and we help them
decide how – bringing Wall Street to Main Street for more than 36 years. TD
Ameritrade has time and again been recognized as a leader in investment
services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more
Brokerage services provided by TDAmeritrade, Inc., member FINRA
(www.FINRA.org)/SIPC (www.SIPC.org)/NFA (www.nfa.futures.org)
About Morningstar Associates, LLC
Morningstar Associates, LLC is a registered investment advisor and wholly
owned subsidiary of Morningstar, Inc. It is part of the Morningstar Investment
Management division, which creates custom investment solutions that combine
award-winning research and global resources with proprietary Morningstar data.
With approximately $149 billion in assets under advisement and management*,
the Morningstar Investment Management division provides comprehensive
retirement, investment advisory, and portfolio management services for
financial institutions, plan sponsors, and advisors around the world.
*Data as of Dec. 31, 2012. Includes Morningstar Associates, Ibbotson
Associates, Morningstar Investment Services, OBSR Advisory Services, and
Carefully consider the investment objectives, risks, charges and expenses
before investing. A prospectus, obtained by calling 800-669-3900, contains
this and other important information about an investment company. Read
carefully before investing.
To trade commission-free ETFs, you must be enrolled in the program. Eligible
ETFs purchased commission-free must be held for at least 30 days. If you sell
an ETF within 30 days of being purchased commission-free, a short-term trading
fee will apply.
The commission-free ETFs selected by Morningstar Associates have been derived
from a universe of ETFs made available through TD Ameritrade, a universe which
does not include all ETFs available in the marketplace. Both the universe of
ETFs defined by TD Ameritrade and the commission-free ETFs selected by
Morningstar Associates are subject to change at any time and without notice.
Morningstar Associates does not warrant this information to be accurate,
complete or timely. Morningstar Associates is not responsible for any damages
or losses arising from the use of this information. Past performance is no
guarantee of future results. Particular commission-free ETFs may not be
appropriate investments for you under your circumstances, and there may be
other ETFs or investment options offered by TD Ameritrade that are more
suitable. Morningstar Associates may have more favorable opinions of certain
ETFs which are not included in the universe of ETFs made available through TD
Ameritrade. The Morningstar selections were based on qualitative factors and
quantitative analysis conducted by Morningstar Associates. Neither Morningstar
Associates nor Morningstar, Inc. is affiliated with TD Ameritrade and its
affiliates. Morningstar, the Morningstar logo, Morningstar.com, Morningstar
Tools are either trademark or service marks of Morningstar, Inc.
ETFs can entail risks similar to direct stock ownership, including market,
sector, or industry risks. Some ETFs may involve international risk, currency
risk, commodity risk, and interest rate risk. Trading prices may not reflect
the net asset value of the underlying securities. Commission fees typically
Commodity ETFs may be affected by changes in overall market movements,
commodity index volatility, changes in interest rates or factors affecting a
particular industry or commodity. Commodity ETFs may be subject to greater
volatility than traditional ETFs and may not be suitable for all investors.
Unique risk factors of a commodity fund may include, but are not limited to
the fund's use of aggressive investment techniques such as derivatives,
options, forward contracts, correlation or inverse correlation, market price
variance risk and leverage.
Investments in bond ETFs are not insured or guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any other government agency. Bonds and bond
funds will typically decrease in value as interest rates rise.
Past performance does not guarantee future results or success.
Asset allocation and diversification do not eliminate the risk of experiencing
International investments involve special risks, including currency
fluctuations and political and economic instability.
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Jeff Goeser, 402-597-8464
Investor Relations & Finance
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