ETF TV News #72 David Botset of Charles Schwab discusses dividend ETFs and Schwab’s 10th Annual ETF survey

Dan Barnes: Welcome to ETF TV News – your update on the latest issued, exchange traded funds and products. I’m Dan Barnes. Joining me today is Debbie Fuhr, of ETFGI, and David Botset, Head of Equity and Fixed Income Products and Strategy at Charles Schwab Investment Management.

Debbie, David, welcome to the show.

Deborah Fuhr: Thank you. Great to be here.

David Botset: Thanks for having me.

Dan Barnes: Debbie, if we can start with you, can you give us an update on the latest products which were issued over the previous week?

Deborah Fuhr: So last week was pretty quiet. There were only 17 new listings from 13 issuers. Two of them were fixed income, four on cryptos, so we’re seeing a lot of interest there. 11 were equity, three were active, ESG, thematics, and one dividend ETF this week.

Dan Barnes: David, turning to you, is now a good time to invest in dividends?

David Botset: You know, at Schwab, we’re really less about trying to time the market and more about providing great value products to investors to help them build diversified portfolios to help generate income. And that’s why we think it’s a good time to bring the Schwab International Dividend Equity ETF to market that we launched just last week. In fact, in the United States, there are about 10.000 baby boomers turning 65 every single day. We really think a product like this can help them build the income that they need in retirement.

Deborah Fuhr: It would be interesting if you could talk a little bit about the 10th annual Schwab ETF survey that you’ve done. What were some of the key findings?

David Botset: One of the things we did this year that was unique, in addition to serving ETF investors, we surveyed one thousand non-ETF investors to get a sense of their attitudes towards ETFs as well, to determine what the future may hold for those that are not currently using ETFs. Across the survey, participants were ages 25-75, with at least 25.000 dollars in investable assets. Of those 1500 that we surveyed that are ETF investors, they’ve indicated that they have either purchased or sold in ETF in the past two years, compared to the other 1000 that are non-ETF investors, they have not purchased or sold an ETF in the past two years.

Deborah Fuhr: What other findings were kind of surprising to you in the survey this year?

David Botset: Really, three things stand out to me; demand, generational usage, and how ETFs are used in portfolios. First, on the demand front, we see investor demand remaining strong. In fact, 94% of the survey respondents indicated that they’re likely to purchase ETFs in the next two years. And that they expect ETFs will comprise 38% of their portfolios within five years, compared to 29% today. On the generational front, we’re seeing millennials leading the way. But Gen Xers are close behind. Today, 29% of millennials plan to significantly increase investments in ETFs, compared to 23% for Gen Xers and only 9% for baby boomers. Finally, for the way they’re used in portfolios, they’ve indicated that their primary usage is to actually help them diversify their portfolios. I think those three findings are particularly interesting

Deborah Fuhr: Based on another study that I just saw from Charles Schwab, it said that 15% of investors in the US stock market were new in 2020, which is pretty exciting to see the growth in so many different dimensions.

Deborah Fuhr: Thank you so much for joining us.

David Botset: Thanks for having me.

Dan Barnes: Debbie, can you give us a bit more color on some of the issues that we saw coming out over the previous week, please?

Deborah Fuhr: So I mentioned that we’ve seen digital or crypto products, so we saw Ethereum (ETH), Stellar (XLM), Cardano (ADA) and Hashdex come out as new crypto products. We also saw that Amundi brought out a fixed income, Paris climate-aligned ETF, and iShares brought out an MSCI World and S&P 500 climate-aligned. So we can see that ESG is part of what we see coming to market every week, as well as thematics. So, it’s been a slower week, but a broad array of products coming to market.

Dan Barnes: Debbie, thank you so much. That’s been great.

Deborah Fuhr: Thank you.

Published on May 4, 2021