Exchange traded funds are valuable and versatile tools in diversifying and managing an investment portfolio. This particular aspect has not gone unnoticed among institutional investors as they have quickly adopted the investment vehicles, increasingly putting more assets to work in ETF products.
According to a press release, a Greenwich Associates study found that a significant number of institutional investors, including corporate and public pension funds, foundations and endowments, utilize ETFs for manager transitions and cash equitization management. [ETFs or Mutual Funds: Why Not Both?]
For instance, 78% of asset managers and 44% of pensions, foundations and endowments implement ETFs for cash equitization. Meanwhile, 61% of asset managers and 55% of institutional funds trade ETFs for manager transitions.
“The Greenwich Associates study confirms the wide range of ETF usage we hear from and discuss with our institutional clients,” Daniel Gamba, Head of Americas iShares Institutional Business at BlackRock, said in the press release. “Institutional investors are expanding the types of ETF applications with a marked increase in liquidity management and portfolio completion.”