Industry Updates

Cerulli: Swiss investors to increase allocations to passives

Tom Eckett

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Passive investing is set to become an increasingly important part of Swiss investors’ portfolios, according to a survey conducted by Cerulli Associates.

The survey of European cross-border managers found 36% of respondents are predicting “fast growth” of Swiss ETF assets while 50% see “moderate growth”.

Furthermore, it found 30% of Swiss private banks are using ETFs to establish cost-efficient diversified holdings while 22% invest in ETFs for sector-specific exposure and 14% use them for tactical positioning.

Fabrizio Zumbo, associate director, retail research, at Cerulli, and author of the report, said demand for emerging market ETFs is increasing among Swiss investors.

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“Given that fundamental valuations remain attractive in the long term and local investors are looking for greater diversification and new drivers of returns, demand for emerging market ETFs is rising,” Zumbo continued.

Elsewhere, almost half of managers surveyed expect environmental, social and governance (ESG) investing to see “moderate growth” in Switzerland over the next 12 to 24 months.

Private banks play a key role in the Swiss retail market and the report said the channel has “significant potential” when it comes to sustainable investing.

Some 73% of Swiss private banks predict an increase in demand for ESG investments from their clients over the next 12 to 24 months.

“Best-in-class is set to remain the most important ESG integration approach for banks in Switzerland,” Zumbo commented.

“However, exclusionary screening, which is essentially a starting point for ESG investing, will decrease as private banks’ approaches to responsible investment become more sophisticated.

“They increasingly adopt ESG engagement, ESG voting, and sustainable thematic investment strategies.”

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