The exchange traded fund investment tool has been a hit with investors, accumulating $2.2 trillion in assets under management, and the ETF industry may continue to find traction among institutions.
According to recent Greenwich Associates research on institutional ETF adoption, ETFs will enjoy $300 billion in annual flows by the year 2020 as institutional investors continue to adopt the easy-to-use tool.
Greenwich Associates’ study was based on 408 global institutional investors, including 137 institutional funds, 141 asset managers, 63 insurance companies, 20 investment consultants and 47 registered investment advisors.
The study revealed that institutions are developing new ways to capitalize on market moves through the funds by investing across various asset classes. For instance, asset managers are using ETFs to augment core positions, to replace derivatives and to find sources of liquidity.[related_stories]