More institutional investors are using ETFs for strategic long-term and tactical short-term portfolio allocations.
“Even though the study found an almost 50-50 split in the nature of ETF usage, it is interesting to note that the most common application was the tactical nature of using the product as a tool to facilitate manager transition,” Walker added.
ETFs also provide exposure to a diversified basket of various asset classes. Recently, a third of institutions and asset managers have honed in on REIT ETFs and another third are usign ETFs for commodities.
“Canadian institutional investors are hungry for real estate exposure,” Greenwich Associates consultant Andrew McCollum said in a note. “ETFs offer a relatively efficient means of obtaining that exposure for smaller funds or for funds concerned about the risk and complexity of investing in real estate directly.”
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Max Chen contributed to this article.