Many exchange traded fund investors utilize the investment vehicle to gain long-term exposure to broad markets. However, a growing number of financial advisors are selecting ETFs for short-term, tactical positions.
According to a Cerulli Associates survey of U.S. monthly product trends, 82% of respondents rate advisor appetite for tactical allocation as a large driver for ETF growth, reports Warren S. Hersch for LifeHealthPro.
Cerullie also revealed other growth factors supporting the ETF industry, including 58% of advisors are pushing to outsource portfolio allocations, and 45% of advisors have an appetite for ETF exposure but are unwilling to trade ETFs themselves. [Three Reasons Why Investors Like ETFs]
Fees are still a driving factor, with 45% or respondents pointing to low fees as a driving factor for ETF growth.
However, education may not be up-to-bar, with only 23% of respondents indicating that education efforts by ETF sponsors are a major driver for ETF growth.
Through distribution channels, 28% of ETF strategy assets went through independent broker-dealers, followed by 21% through wirehouses, 16% through regional broker-dealers, 15% through third-party vendors, 14% through registered investment advisors, 2% through direct channels, 2% through bank broker-dealers and 2% through bank trust/private client groups.