A recent study by Fidelity Investments is the latest to show that affluent investors are embracing exchange traded funds and are expected to increase their usage of these investment vehicles.
“More than 43% of nearly 600 investors who responded to a June 5 online poll are considering raising their ETF stake over the next 12 months,” reports Aparna Narayanan for Investor’s Business Daily. Most of the investors surveyed had at least $250,000 in investable assets.
The Fidelity survey shows that while over a third of respondents plan to use ETFs for broad market exposure, a quarter are not using ETFs because they need to learn more about the asset class.
Fidelity’s survey jibes with previous studies that indicate wealthy investors have been eager to use ETFs in their portfolios. According to data released last year by the Spectrem Group, 28% of investors own ETFs, but among the ultra-affluent investors, who are worth $5 million to $25 million, 47% own ETFs due to the investment vehicle’s low fees. [ETFs Attract Rich Investors]
When it comes to ETF usage among wealthy investors, those investors appear to be following the lead of big institutions.
A study conducted by Greenwich Associates and sponsored by BlackRock (NYSE: BLK) study shows 46% of institutional ETF investors surveyed allocate 10% or more of total assets to ETFs with 47% saying they expect to boost ETF usage over the next year.
“About 30% of institutional ETF investors report ETF allocations in the 10% to 25% range. RIAs, who are the largest users of ETFs by assets, have the largest ETF allocations with 41% of RIAs investing more than 25% of total assets in ETFs,” according to the study. [Institutions Boost Use of ETFs]
Fidelity introduced 10 of its own sector ETFs last October, all of which charge 0.12% per year, making them the least expensive sector ETFs on the market. That lineup has since swelled to over $1 billion in combined assets under management. [Fidelity ETFs Race to $1B in Assets]
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.