State Street Global Advisors (SSgA), the investment management arm of State Street Corporation Knowledge@Wharton, the online business journal of The Wharton School at the University of Pennsylvania, note that two-thirds of 840 investment professionals surveyed identified exchange-traded funds (ETFs) as the most innovative investment vehicle of the last two decades.
And – asked about the greatest potential growth arena for ETFs, 43% of advisors surveyed cited 401(k) plans.
The top five most appealing characteristics of ETFs, as ranked by financial advisors include:
- Low cost;
- Intraday trading;
- Tax efficiency; and
- Investment style purity.
When asked about the greatest disadvantages of ETFs, 69% of the advisors surveyed cited their, “unknown/untested indexes and/or portfolio methodologies” or the, “overwhelming number of choices.”
Additional survey findings include:
- Roughly three-quarters (76%) believe the use of ETFs encourages fee-based models.
- Some 60% of respondents said they knew what exchange traded notes (ETNs) are, and 29% indicated that they plan on increasing their use of ETNs in the future.
- Only 31 percent of advisors are currently using inverse ETFs, which allow investors to bet against a market index. However, nearly 40% report that they plan to increase their use of inverse ETFs in the future.
A report featuring the findings of this joint survey titled, The Impact of Exchange Traded Products on the Financial Advisory Industry is available to financial professionals registered atwww.spdru.com.