The growing exchange-traded fund space has endured a rocky stretch this year along with broader markets. But experts stress that, as ETF providers and investors adapt to new market dynamics, the segment can prove as effective as it did during the largely uninterrupted bull run in recent years.
ETFs saw nearly $250 billion in net inflows last year as assets under management topped $2 trillion. But amid widespread selling this year, ETFs have seen net outflows of $7.87 billion and assets have fallen by 8.2 percent, according to XTF ETF Experts.
As a changing market, including lower oil prices and the start of a Federal Reserve tightening cycle, cloud investor outlook, pros tout the funds as tools to diversify and protect portfolios. At the same time, the industry is fighting the perception that its products may have worsened recent market swings.
ETF players will discuss those issues and more starting Sunday at the ETF.com Inside ETFs Conference in Florida.
"The outflows aren't because people are concerned about the structure of the ETF. They're because people are leaving the market," said Kris Monaco, head of ISE ETF Ventures, which designs and helps to launch exchange-traded products. "There are ETFs that can hedge your exposure and decrease volatility, and people aren't taking advantage of all those tools,"