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Delve: Can Loyalty in Investor Relationships Calm the Competitive Disruption of ETFs?

Published: 9 June 2022

On the surface, the Exchange Traded Fund or ETF is a relatively straightforward concept, but it has become a major disruptor in the sphere of money management. In the past few years, mutual fund managers started to also manage ETFs for their clients—a way to potentially alleviate competition, maintain client loyalty, and keep institutional money within a growing family of funds.

“There has been a tectonic shift in the industry,” says Desautels Professor David Schumacher, whose recent research paper examines manager-client relationships and the competitive rise of ETFs. “We wanted to know how money management firms were responding to this competitive threat, Schumacher stresses. “This is ultimately about relationships in finance. The notion of client loyalty is obvious in many other industries but is underexplored in finance… It is less explored whether relationships or loyalty-based forces also apply to institutional investors that are thought of as more sophisticated.”

For more insights, read to the article with Professor Schumacher on and read the .


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