The survey reflects the responses from 373 professional investors from 18 countries who oversee a total of USD347 billion in ETF assets, estimated by TrackInsight to represent 5 per cent of the global ETF market, with more than half having over 40 per cent of their total portfolio invested in ETFs.
Cost efficiency is the main reason cited for using ETFs, while liquidity is the main criteria used in ETF selection, the survey found, while 57 per cent of investors have used ETFs to replace active mutual funds, up from 39 per cent in 2020.
The survey reports that 52 per cent of investors are planning to increase their exposure to Thematic ETFs, primarily to technology and ESG sectors and that, despite tripling assets in 2020, 50 per cent of investors still have no exposure to ESG ETFs.
Jean-René Giraud (pictured), founding CEO of TrackInsight, says: “The results of this year’s survey reveal a maturing industry which is rapidly adapting to new types of products, new types of investors and new digital ways of operating.
“There are many lessons to be learned from the Covid crisis, but perhaps the most enduring of which is that resilience and adaptability is the essence of survival, and the world’s largest and most sophisticated investors have been quick to embrace many new ideas that are now available as ETFs.
“Active strategies, thematics and new assets like SPACs and Cryptocurrencies have helped redefine what ETFs are and are also paving the way for future growth. With the current tailwinds and seemingly unstoppable rise of ETFs, the industry is on track to near the USD10 trillion assets under management milestone this year.”
Owen Rees, Global Head of ETF & Benchmarking Solutions at IHS Markit, says: “This year’s survey shows that global investors have a growing interest in ETFs with active, ESG and thematic strategies. IHS Markit is also observing these trends throughout our proprietary data, analytics and indices, and as market participants adapt to meet evolving investor demands, we will continue to support them across the ETF ecosystem.”
Olivier Paquier, Head of ETF Distribution in EMEA at JP Morgan Asset Management, says: “When you pair TrackInsight’s survey results with what we’ve seen in terms of flows into ETFs over the past year, it’s clear that investors’ understanding of the role of ETFs in portfolios continues to deepen; this includes many investors diversifying their exposure beyond traditional ETFs.
“We’ve seen growing interest in thematic, actively managed and ESG ETFs; trends which are still at their early stages, both in terms of investor uptake and product offerings. We believe the ESG ETF trend in particular has a lot of room for growth.
“In terms of what’s driving ETF selection more generally, this year’s survey findings reinforced how the overarching attributes of ETFs – cost efficiency, price transparency and liquidity – that have served investors for more than 30 years, continues to remain in focus.”