Global ETF holdings set to rise as investors plan to increase ETF allocation

by , 11th February 2019

Nearly 30% of institutional investors, financial advisors and fund managers purchased a smart-beta ETF to replace an actively managed mutual fund in 2018. This is according to Brown Brothers Harriman (BBH) and ETF.com which collaborated for the sixth annual ETF investor survey.

The survey questioned 300 institutional investors, financial advisors and fund managers from around the globe, asking for their expectations and preferences from 2018.

Not all investors worry about following the crowds or pursuing the latest trends. 40% of those surveyed are comfortable in buying a new ETF with less than $25m in Assets Under Management, according to the study. This suggests investors are showing an openness to newer products.

Global holdings in ETFs are set to rise as 61% or respondents stated they are planning to increase their ETF allocation in the next 12 months. Another 26% said they would maintain their current value of ETF investments.

Greater China narrowly leads with respect to investors’ ETF exposure, with 80% of the region’s respondents holding at least 10% of their AUM in ETFs. Just behind China is the US with 79% and then Europe with 73%.

Shawn McNinch, Global Head of ETF Services at BBH, said in a statement: “While much has been said about the low-cost nature of ETFs, our survey finds that professional investors are looking beyond the lowest-cost products and seeing tactical vehicles like smart beta and active ETFs as ways to bolster returns or mitigate risk, especially in periods of heightened volatility.”