Exchange traded funds (ETFs) may have seen a swift rise in the investing world, but hidebound advisors are loath to add passive ETF products to their client portfolios.
According to new research from Cerulli Associates, ETFs are not poised to steal market share in the advisor channel, writes Hannah Glover for Ignites. Cerulli found that around half of advisors surveyed used ETFs; however, ETFs were only about 5% of their client portfolios.
A survey titled “Exchange Traded Funds: Threat or Threatened?” with more than 400 advisors reveals that 45% of participants prefer using actively managed funds in client portfolios instead of passive ETF products and 21.7% are reluctant to reallocate existing client portfolios.
Since 2005, overall assets in ETFs jumped from $300.8 billion to $693.4 billion as of September, and ETF products increased to around 700 products from 204. But observers argue that this is only a small figure compared to the $10.8 trillion in total assets found in mutual funds.