ETF Trends
ETF Trends

A recent report from Greenwich Associates indicates that institutional investors are readily using exchange traded funds to assist in fund management practices. The study underscores the importance of the funds to assist in transition management, liquidity, and the equitization of transactional cash for asset allocation use.

“We are pleased by the Greenwich Associates study confirmation of these trends in ETF investing. Evidence indeed shows institutions are increasingly using ETFs for both tactical and strategic purposes, and we expect these trends to continue,” says Liz Tennican, Head of U.S. iShares Institutional at BlackRock. [BlackRock Responds to Speculation on Silver ETF Holdings.]

The investors interviewed for the study indicate that about 63% use ETFs for transition management purposes, which is up 38% from the same Greenwich study in 2010. The use of ETFs for liquidity strategy is up 10% and ETF usage for cash equitization rose 51% for the same time period, according to the BlackRock/iShares press release. [BlackRock Response to G20 FSB Warning on ETFs.]

The trend toward expanded usage of ETFs by institutional investors and the institutional investment community is supporting iShares approach, according to Tennican. The latest study was conducted from February through April 2011, and all participants were from organizations that use ETFs for their portfolio holdings. [New iShares ETFs Launch: Dividends and China.]

The Greenwich study also identified iShares as the leading ETF provider of choice by institutional investors. Within the study, about 85% of asset managers and 78% of institutional funds cited iShares ETFs among their holdings.

Tisha Guerrero contributed to this article.

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.