TD Ameritrade ETF Clients Show Home Bias

Client trends show a preference for U.S. over foreign stocks.

Reviewed by: Cinthia Murphy
Edited by: Cinthia Murphy

Investors have been favoring international equity ETFs for the past several months, but at TD Ameritrade, home bias is still king.

Since 2012, in aggregate, TD Ameritrade clients have been trimming their allocation to international stocks. The cuts haven’t been that big, but they still seem counter to a trend in the broader ETF market that’s picking up steam this year.

Consider that in May alone, investors poured more than $12 billion in foreign stock funds—and yanked a net of $77 million from U.S. equity ETFs. Today roughly a quarter of U.S.-listed ETF assets are in international equity funds, according to data compiled by

According to Alex Teyf, director of mutual funds and ETFs at TD Ameritrade, this trend points to a strong preference for large-cap U.S. stocks, particularly by younger TD Ameritrade investors.

Home Bias, By The Numbers

At TD Ameritrade, investors who are 25 years old and younger, as well as those who are in retirement age, have done the most trimming in their international allocation in the past few years—each group reduced its respective allocations to foreign equities by 4 percent.

Teyf declined to disclose any asset figures due to company policy, but the commission-free ETF platform offers access to 31 different international funds.

Here’s a snapshot of the TD Ameritrade ETF investor today:

  • Roughly 14 percent of ETF assets custodied at TDA are in the hands of 26- to 35-year-olds. That includes assets in the firm’s commission-free ETF trading platform as well as outside of the platform. Millennials are the firm’s biggest single demographic.
  • Roughly a third of assets today are in the hands of clients under the age of 45.
  • Retirees—66 years old and older—now account for about 10 percent of total ETF assets at TDA. This segment has seen impressive growth of about 30 to 40 percent in the past five years, most likely fueled by a need for income and a desire to lower overall portfolio costs. ETFs are typically cheaper to own than mutual funds.
  • TD Ameritrade clients are typically active-trading clients. The firm is now looking to attract more buy-and-hold-type investors through its extensive ETF and mutual fund offering.



Liking Health Care

Other trends taking shape at TD Ameritrade include growing demand for health care stocks, which makes sense if you consider that health care has been the best-performing S&P 500 sector for the past few years.

In the past five years, the health care sector has rallied roughly 170 percent, while the S&P 500 is up 97 percent in the same period. By comparison, the energy sector—the worst performer in the period—is up only 55 percent.

On the flip side, TD Ameritrade ETF clients have been cutting back on commodities, as the asset class suffers from concerns about aggregate demand in a relatively weak global economy. Here, older investors are trimming the most, according to Teyf.

ETF clients 56 years old and older have cut their allocation to commodities anywhere from 10 to 14 percent in the past few years. Millennials have reduced their allocations by about 7 percent in the same period.

Avoiding Commodities

The performance of the two commodity ETFs offered in TDA’s commission-free platform certainly reinforces the idea that owning commodity funds hasn’t been a prospective investment in the past two years.

The $3.2 billion PowerShares DB Commodity Tracking ETF (DBC | C-61) and the PowerShares DB Oil ETF (DBO | B-88) have faced a sharp decline in the past year. The chart below plots the funds’ two-year performance: 

Chart courtesy of



Cinthia Murphy is head of digital experience, advocating for the user in all that does. She previously served as managing editor and writer for, specializing in ETF content and multimedia. Cinthia’s experience includes time at Dow Jones and former BridgeNews, covering commodity futures markets in Chicago and Brazil equities in Sao Paulo. She has a bachelor’s degree in journalism from the University of Missouri-Columbia.