Taking the Pulse of Advisors on ETFs and the Markets | ETF Trends

The Advisor Confidence Index (ACI) is a measure used to take into account the amount of confidence that financial wizards have in the economy, shares and exchange traded funds (ETFs). What does the ACI indicate now?

The ACI puts advisors “in the know” regarding their counterparts’ economic opinions, according to participating advisors. Partially modeled after the Consumer Confidence Index, the ACI captures the sentiments of 150 independent registered investment advisors (RIAs) who complete a monthly survey about their outlook on the economy for various time periods, reports Maya Ivanova for Investment Advisor.

Among the findings:

  • Advisors are more optimistic, but they’re taking steps to enhance diversification in client portfolios as a direct result of the market crisis in 2008-2009.
  • Advisors are increasing exposure to alternative investments (this includes ETFs) and they foresee increasing their allocation to such investments in the next five years. [How to Read an ETF Chart.]

Over the last 14 months of ACI history, advisor sentiment has gone along with the market’s performance. However, their outlook never plummeted as far as the market did in late 2009, as you can see in the chart below. The good news is that the sentiment is once again positive and the upward momentum should sustain. [10 Reasons to Love ETFs.]

For more stories about ETFs, visit our ETF 101 category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.