Global assets and ETFs reached a record $12.4 trillion at the end of the third quarter, according to Morningstar. In addition, 65% of investors are planning to increase their ETF investments within the next five years, according to a Charles Schwab report.

David Botset, Schwab Asset Management head of innovation and stewardship, joins Wealth! to discuss the growth of ETFs.

"What we're seeing from ETF investors is they are very confident in the decisions that they make. And I think that is driving much of the inflows we're seeing this year," Botset tells Yahoo Finance. He notes that many investors are repositioning in fixed income as the Federal Reserve has kicked off its rate-easing cycle. He also explains that investors are using ETFs to stave off associated volatility risks.

Botset adds that ETFs are a great way to lower the costs of investing. "The number one driver of decisions in selecting ETFs is about the cost. So I think investors are looking at not only how they diversify their portfolio, but 'how do I bring down the cost of investing?'"

He highlights that millennials, in particular, have shown "a higher propensity to use ETFs" while older generations usually stick with mutual funds. He believes that millennials are more attracted to ETFs because of their cost, as well as being an accessible entry point to investing in the market.

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This post was written by Melanie Riehl