Exchange traded funds, a low-cost and efficient way to gain exposure to broad markets and relatively harder to reach assets, are catching on with the financial advisor community.

In a survey, about 16.5%, or 66 of the top 400 advisors, allocate 20% or more of their total assets under management toward ETFs, reports Danielle Verbrigghe for Financial Times.

“We find that ETFs give us the lowest cost, most tax-efficient way to obtain those target returns,” Ron Vinder, an adviser at UBS Financial Services, said in the article.

ETFs, like stocks, trade on an exchange, with fluctuating prices throughout the day. Any investor can access the the funds through a normal brokerage account. The investment tool provides exposure to stocks, bonds, commodities and currencies, among other asset classes and niche strategies.

Advisors have been extolling the diversification qualities as a key factor in investing in funds. Additionally, more advisors are pointing to low costs as a key factor in picking ETFs to help bolster overall returns – U.S.-listed ETFs have an average 0.61% expense ratio and the cheapest ones on the market come with a 0.04% annual fee.

“I wound up getting tired of paying managers’ fees in very efficient asset classes,” Craig Pastolove, an adviser at Morgan Stanley, said in the article. “Now that we are able to use ETFs, the costs have come down significantly.”

Other advisors utilize ETFs as a tactical investment tool, benefiting from market corrections or intra-day price swings.

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