The current issue of Insight documents the growing convergence between exchange-traded funds (ETFs) and mutual funds. Increasingly, “mutual funds versus ETFs” describes only part of the competitive picture; the other part is “mutual funds with ETFs”.
In the mutual fund arena, the ETF issuers’ strategy of fitting into other providers’ business models is bearing fruit in the form of increased allocations to ETFs by mutual funds and fund wrap portfolios. Meanwhile, the ETF segment itself has begun to embrace features that have traditionally been the exclusive preserve of mutual funds—active management, trailer compensation or funds-of-funds structure.
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