There is some anecdotal evidence that some pension funds are paring exposure to ETFs. For example, it was reported last week that the New Jersey Pension Fund has dramatically slashed its stake in the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO). However, the fund still maintains positions in the iShares MSCI EAFE ETF (NYSEArca: EFA), iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) and the iShares MSCI South Korea Capped ETF (NYSEArca: EWY), according to the New Jersey Division of Investment. [Pension Reduces EM ETF Exposure]
Earlier this year, the first U.S. fixed income ETF study by independent research firm Greenwich Associates and sponsored by BlackRock indicated increased usage of bond ETFs at the institutional level. The newest survey confirms as much. [Institutions Boost Bond ETF Usage]
“Over the past 12 months, the share of asset manager ETF investors employing fixed income ETFs significantly increased. The biggest and potentially most important increase occurred in domestic fixed income, where the share of asset managers jumped to 72% in 2014 from 30% in 2013. For international fixed income, in 2013, asset managers reported virtually nothing in the way of ETF. In 2014, nearly half of asset manager ETF investors are employing the vehicles in that asset class,” according to the survey released Monday.
The new Greenwich survey says over 80% of asset managers favor ETFs for tactical applications and adjustments within client portfolios. That jibes with data from previous surveys highlighting increased usage of smart beta ETFs by institutions. [Institutions Increase Smart Beta ETF Exposure]
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM, EFA and IEMG.