By Murray Coleman

–Evidence mounts that ETFs aren’t just trading tools

–More retirement funds, endowments adopting ETFs

–ETF advisers remain largely long term in focus

Since turning to exchange-traded funds to build investment portfolios for high-net-worth and institutional clients more than a decade ago, adviser Rob DeHollander says he has seen a stigma form around the industry.

Contrary to popular views that ETFs contributed to the “flash crash” in May 2010 and other high-frequency trading mishaps, a growing number of conservative investors managing endowments and large pension funds are turning to ETFs, notes the co-founder of DeHollander & Janse. The firm in Greenville, S.C., manages about $100 million in assets.

“There’s no doubt ETFs are popular with hedge funds and day traders,” Mr. DeHollander says. “But they’re also finding broader acceptance among institutional investors and wealth managers with longer-term investment strategies.”

How much is a source of rising industry debate. A recent Deutsche Bank study found that advisers with discretionary control over client portfolios and more than $100 million in assets in 2011 overwhelmingly accounted for the biggest chuck of ETF assets held by big, institutional-level investors. Continue reading →