ETF Assets Surge as Advisors Urge Strategic Approach Amid Market Volatility

Exchange-traded funds (ETFs) have reached new milestones in investor adoption, topping $10 trillion in assets for the first time in November and climbing to $13.74 trillion as of June, according to data from Cerulli Associates and Hightower Advisors. While ETFs offer flexibility, lower costs, and tax advantages, financial advisors emphasize the need for a clear investment strategy, particularly when markets become turbulent.

Similar to mutual funds, ETFs are baskets of securities that track broad indexes, but they can be bought and sold throughout the day. “The best thing about the ETF is that it’s not like old school mutual funds,” said Gloria Garcia Cisneros, certified financial planner at LourdMurray. She noted that ETFs’ flexibility allows trading during market hours, unlike mutual funds, which are priced once daily after market close.

Man checking a financial chart | Source: Pexels

Lee Baker, certified financial planner and president of Claris Financial Advisors, stressed that having a plan helps investors stay disciplined when “things inevitably get a little crazy.” Baker advises avoiding trades during the most volatile periods — market open (9:30 a.m. ET) and close (4 p.m. ET) — suggesting instead the calmer window between 10 a.m. and 2 p.m. ET.

Both advisors caution against market timing, which studies show offers limited advantage over consistent investing. The Charles Schwab study they cited found that even a “perfect market timer” only slightly outperformed a disciplined annual investment approach. Strategies like dollar-cost averaging — investing fixed amounts at regular intervals — can help reduce timing risks.