ETF Investment Choices

When it comes to exchange traded funds, different types of investors have different goals. For instance, institutional investors have been looking at broad equities while individual investors and advisors leaned toward income and mitigating risk.

According to a list of the most researched investments on Morningstar‘s platform, about half of the most popular ETFs among institutional investors covered domestic and international equities over 2012. Specifically, institutional investors were mostly browsing large-cap equity strategies.

Meanwhile, advisors and individuals focused on income and risk mitigation over 2012. Individual investors sought income to boost their portfolios, while advisors were interested in inflation-hedging and emerging market ETFs.

“Individual investors and financial advisors have been focused on producing income and avoiding risk for the last four years,“ Paul Justice, director of fund research for Morningstar, said in the report. “While their risk aversion is high, they seem to be making an exception for emerging market equities, which illustrates that whatever risk appetite remains is focused overseas.”