Exchange traded funds (ETFs) are taking the investment world by storm, and it’s not just individual investors making good use of them. Large institutional trader also prize the funds for a few reasons.According to recent reports from Greenwich, the ETF industry is getting a firm footing in the institutional market, and they’re using tactical strategies to get their exposure. Douglas Appel for Pensions and Investments reports that a recent study indicated that 43 plan sponsors and 27 money managers surveyed March 8-16 cited “tactical adjustments” to gain temporary market exposures and transitions as the primary use of ETFs. [Why Buy and Hold Is Out.]
Also, around 14% of U.S. pension funds, endowments and foundations surveyed reported using ETFs as an investment tool. Although this is still a small sample, these institutions happen to account for roughtly half of all ETF assets.
BlackRock was the ETF provider institutional investors turned to most often, with 89% saying they used that company’s funds. Interesting, since BlackRock recently announced that its iShares ETFs hit a whopping $500 billion in assets. [Following Trends in Today’s Economy.]
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