Boston, MA 09/16/2014 (wallstreetpr) – Wells Fargo & Co (NYSE:WFC) has for the first time decided to expand the use of ETFs and Bond Funds to create some good quality portfolios. As per the information made available by the company, it used to invest into individual securities including bonds in order to generate significant returns under Compass Advisory Program’s fixed income accounts. The market has started offering more challenges and options now; hence, the company has introduced ETFs as well. Now the investment managers will be able to invest various mutual funds and exchange traded funds. It will not only generate various opportunities to earn extra cash, but also provide flexibility, easy trading and extra liquidity.
Why WFC has to take this move:
The investment trends have changed over the past few years. Earlier the companies used to invest more into individual securities, but now they want to diversify their risk; hence, they look to invest in pooled funds or ETFs. Brokers and dealers rely more on selling loop funds like bonds than individual securities. It has prompted Wells Fargo & Co (NYSE:WFC) to introduce ETFs in its offerings. According to Dave Nadig, Chief Investment Officer at ETF.com, due to increased risk taking capacity and options availability, investors are getting more attracted towards such options. Bond ETFs are considered as more liquid options than other individual investment avenues. That’s the main reason people are looking to explore Bond ETFs more than other options these days.
As per the data collected by a well-known asset management company Cerulli Associates, ETFs and mutual funds covered 41.7% of total managed accounts in 2008, while, in 2013, they accounted for 52.4% of total managed accounts. If taken into consideration the trend of investment in individual securities like stocks and bonds, people can witness close to 1% decline over the same five-year period. The trend is likely to continue in the future as well.
