More financial advisors and individual investors are adopting ETFs. However, large institutional investors were the first group to really appreciate and utilize the benefits of low-cost ETFs. Now the “smart money” is incorporating the financial products more in buy-and-hold strategies, according to a recent survey.
“The findings reveal that strategic, long term use of ETFs is the most dominant application across pensions, foundations, endowments and asset managers,” iShares said, reports Brendan Conway for Barron’s. “Increasingly larger pensions, foundations and endowments are using ETFs, debunking the view that only smaller institutional investors use ETFs strategically.”
The fund provider highlighted that passive core allocations, or index strategic allocation, is the most popular use for ETFs, followed by tactical strategies, risk management and rebalancing.
“Asset managers tend to use ETFs more for tactical strategies and risk managements than pensions, foundations and endowments,” iShares added.