The ETF industry has a new and high-ranking fan in the form of
newly nominated U.S. Treasury Secretary Jacob Lew.
The White House chief of staff whom President Obama is having
replace Tim Geithner appears to be a big believer in indexing, with
many of his investments tied to low-cost index
, according to his Executive Branch financial disclosure report
dated May 2012.
Lew listed several ETFs as part of his portfolio, including the
SPDR Dow Jones Industrial Average ETF (NYSEArca:DIA), the iShares
Russell 2000 Index Fund (NYSEArca:IWM), the PowerShares QQQ Trust
(NasdaqGM:QQQ), the SPDR S&P MidCap 400 ETF (NYSEArca:MDY) and
the SPDR S&P 500 ETF (NYSEArca:SPY).
The bulk of Lew's assets are tied to TIAA-CREF, a nonprofit
asset manager of retirement accounts. His investments also included
anywhere from $50,001 to $100,000 worth of Israeli government bonds
and a small amount of U.S. Treasury notes amounting to less than
The financial disclosure speaks volumes about Lew's belief in
low-cost funds, and he is not alone. Indeed, the 20-year-old ETF
industry has been gathering assets at a record pace, flirting with
$1.4 trillion in assets benchmarked to some 1,400 U.S.-listed ETFs.
Investors, it seems, are more and more focused on how important
minimizing costs are to successful investment.
"Jack Lew will bring an impressive record of service in both the
public and private sectors for over three decades, and economic
expertise, to this important role, and his deep knowledge of
domestic and international economic issues will enable him to take
on the challenges facing our economy at home and abroad on day
one," a White House official said, as reported by ABC news.
Lew, who currently serves as the White House chief of staff,
also served as President Obama's budget director, and before that,
served as chief operating officer of Citigroup's Global Wealth
Management and Alternative Investments divisions.
President Obama is expected to officially announce Geithner's
replacement later today.
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