Which clients are asking for more ETFs? The answer: All of them.
Demand for ETFs is expected to grow exponentially in the coming years
, according to a recent study. Investors say more than a quarter of their portfolios (27%) are invested in the funds, up from 16% in 2012, according to the latest ETF Investor Study by Charles Schwab. Nearly 42% of the 1,200 ETF investors polled say the funds will be a primary component of their portfolios in the future, up from 28% in 2016. Around one-third said they would invest more than $50,000 if they were given $100,000 today, up from 28% last year.
“As investors have become more familiar with the versatility of ETFs, their confidence levels have grown,” said Heather Fischer, vice president of ETF and mutual fund platforms at Schwab. “Half of ETF investors consider their understanding of ETFs at an intermediate level, and almost all (93%) are now fully confident in their ability to choose an ETF that is right for their investment objective.”
Of all age groups polled, millennials are most likely to include the funds in their portfolios. Nearly 60% said they expect to use ETFs to reach their long-term investing goals. Sixty-two percent said they would rather hold ETFs than individual securities, according to the report.
“Millennials continue to lead the charge when it comes to ETF adoption,” Fischer said, adding that because the age group has grown up with the funds, “they seem to be more comfortable than other generations in embracing them as their investment vehicle of choice — and enjoying the benefits of low costs, tax efficiency and transparency.”
Scroll through for the most significant findings on ETFs reported in the study.