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Buy ETFs AND Their Sponsoring Companies

ETFs are benefiting the stocks that sponsor them

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Buy ETFs AND Their Sponsoring Companies

It’s no secret that we love exchange traded funds (ETFs) here at InvestorPlace.

Vanguard Buy ETFs AND Their Sponsoring CompaniesFunds like the Vanguard Total World Stock Index ETF (VT) can provide plenty of broad market exposure and be used as essential building blocks in both “core” and “explore” situations. Meanwhile, ETFs do all of this on the cheap — with substantially lower expense ratios than their mutual fund twins.

Those two factors — along with ETFs’ passive nature — can give regular retail investors a leg-up on many of their peers over the longer haul. Investors seem to like that idea and have plowed big bucks — around $1.7 trillion — into ETFs over the last few years.

Which raises the question — who’s making the money off all of that activity? That would be the ETF sponsors. For investors, their shares are just as lucrative as some of their funds. Despite their lower expense ratios, ETF sponsors make some pretty big bucks off their underlying funds. Those dollars have translated into some pretty hefty earnings and capital appreciation as the ETF movement has taken place.

And with ETF adoption not abating, those profits should continue to roll in for sponsoring firms. So if you like a company’s ETFs, you’ll probably love its stock. Here are four of the best.


Article printed from InvestorPlace Media, http://investorplace.com/2013/12/blk-stt-ivz-wetf-etfs/.

©2014 InvestorPlace Media, LLC

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