Moreover, Valerie Chaillé, practice-management director at the Financial Planning Association, pointed to the multi-year rally in broad benchmarks as a contributing factor as well.
“When equities markets do well, investors tend to favor passive investments over active investments,” Chaillé said in a Wall Street Journal article.
Over the next 12 months, 51% of surveyed participants plan to raise their ETF usage or recommendations, and no other investment vehicle showed this level of popularity among advisors. In contrast, only 23% of respondents plan to raise their use of mutual funds and 22% want to add on individual stocks. [Why Investors Should Stick to Passive, Index-Based ETFs]
Alternative index-based or smart-beta ETFs are also gaining traction among financial advisors. The survey revealed that 22% of advisors have used smart-beta ETFs with clients over the past 12 months, and 14% stated that they raised their use or recommendation of smart-beat over the last 12 months.
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.