Advisors are using exchange-traded funds (ETFs) more than ever. RIAs’ use of ETFs rose 27% annually over the past five years, according to a new study by Cerulli Associates. From 2011 to 2012 the allocation to ETFs among RIAs grew by 48%. Nearly a quarter of new client dollars go to ETFs.
And there are more ETFs than ever to choose from. In 2004, there were fewer than 1,000 ETFs, representing approximately $300 billion in assets. Today, there are nearly 4,000 ETFs with $1.7 trillion in assets.
With so many products on the market catering to different investor needs, advisors need choices in how and where they trade ETFs. That’s why Trust Company of America now has alliances with five ETF liquidity specialists offered directly through TCAdvisor. No other major custodian provides advisors direct access to multiple ETF specialist execution sources on their front end trading platforms.
Each execution source partner specializes in certain ETF sectors and can offer better prices and deep expertise in the ETF trading environment.
ETF liquidity specialists include:
- ConvergEx ETF Desk, a leading provider of global brokerage and trading-related services for institutional investors and RIAs. In addition to a specialized ETF desk, ConvergEx offers comprehensive ETF capabilities including the ability to obtain two-way markets and NAV quotes from liquidity providers. As an Authorized Participant for all major ETF fund families, ConvergEx can also provide enhanced liquidity by accessing the underlying constituents through the creation/redemption process.
- KCG (Knight Capital Group), one of the largest sources of exchange-traded fund (ETF) liquidity in the U.S. KCG provides clients with access to deep buy- and sell-side ETF order flow through a full spectrum of trading solutions, as well as a consultative approach to product selection and execution. KCG’s ETF trading team offers clients agency and principal facilitation across all ETF sponsors, in all ETFs, in the Americas & Europe.
- WallachBeth Capital, an agency-only execution firm providing best execution in ETFs, CEFs and options for leading institutional managers. The firm has one of the largest agency-only ETF desks in the industry, offering seamless connectivity to more than 40 capital-centric liquidity providers/market-makers and seeks to deliver true best execution for clients—a fundamental component to clients meeting their fiduciary obligations while preserving and enhancing Alpha.
- Wolverine Execution Services (WEX), a provider of value-added execution, enabling institutional clients to trade ETFs and equities through its agency brokerage desk, proprietary electronic trading platform, dynamic algorithms, and floor access. The firm’s proprietary execution capabilities combine sophisticated technology, powerful pre-trade analytics, extensive trade oversight, and knowledge that set a new standard for ETF execution.
- Cantor Fitzgerald, providing a full-service, all-asset-class ETF & Equity trading desk, focused on providing competitive risk markets and the facilitation of principle and agency transactions across all asset classes. The firm offers advanced and diversified execution methods customized to achieve best execution for orders including block trading, “high-touch” worked orders, algorithms, and dark pool access.
TCA continues to forge new alliances and will inform advisors of additional execution sources as they are made available. Contact your relationship manager to learn more or to use one of TCA’s existing ETF execution sources.