Most ETF Users Are Buy-And-Hold Investors

Exchange traded funds have given mom and pop investors broader access to a myriad of investment themes and strategies. While some are concerned that the plethora of choice and ease of use could cause staunch investors to become day traders, data reveals that most are using ETFs as core long-term positions.

According to Fidelity data pulled from customer accounts, clients held 4.1 ETFs on average or up 32% from four years earlier, Todd Rosenbluth, Director of ETF Research at CFRA, said in a research note. Additionally, as ETFs grown in popularity, the average ETF was held 26 in advisory accounts while it was held 19 months for retail accounts.

Investors were also more likely to sit on equity ETFs than taxable fixed-income options. Specifically, the average holding period of U.S. equity and international equity ETFs was 27 months and 25 months in advisory accounts, respectively, and 20 months for both categories among retail investors.

Taxable bond ETFs were held for 24 months and 16 months among advisory and retail accounts, respectively.