Most investors still don't own ETFs: study

Most investors still don't own ETFs: study
Low usage reflects widespread lack of familiarity with the investments.
MAR 02, 2015
Even as the exchange-traded fund industry grows at a record pace, with more than $2 trillion in assets, over two-thirds of retail investors still haven't parked dollars in the product, reflecting a widespread lack of knowledge about ETFs. A new study of more than 1,000 investors by investment firms BlackRock Inc. and Fidelity Investments found that just 32% currently own ETFs. Among those who don't own ETFs, 61% simply don't know about them. “While ETF investments have more than doubled in the last five years, there is still significant opportunity to raise awareness as more than two-thirds of investors report they have yet to tap the potential benefits of ETFs in their portfolios,” Andrew Brownsword, senior vice president at Fidelity retail brokerage, said in a statement. (More: Schwab, Guggenheim make their mark in ETFs) The study also found that 20% of people who don't own an ETF plan to purchase one in the coming year, while 46% of investors who have ETFs plan to increase the amount invested over the next three years. The study, which also included interviews with 251 financial advisers, found that 72% of advisers expect to increase their allocation to ETFs in the next three years, with a quarter of them expecting to “significantly” increase their allocation. Three-quarters of advisers are using ETFs within client portfolios and roughly the same percentage want to learn more about the products. The study found that advisers are most interested in learning about which ETFs are appropriate for their clients and when ETFs should trump mutual funds in a client's portfolio.

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