Australian institutions warming to ETFs

Australian institutions warming to ETFs

More than two-thirds of Australian institutional investors believe ETF use will become more prevalent among their peers in coming years, according to a new survey.


A survey of 35 institutional investors by VanEck has indicated that the largest Australian investors are willing to increase their exposure to ETFs.

The Australian VanEck Institutional ETF survey was conducted in February 2017 and included responses from seven industry funds, five retail funds, 11 asset managers and four asset consultants.

The survey found that over half (55 per cent) of respondents are currently using ETFs in their portfolios, and 70 per cent believe ETFs will become "more prevalent" in coming years.

For the institutional investors not currently using ETFs, 53 per cent said they would "probably" use them in the future.

The major stumbling blocks for institutions when it comes to ETFs are primary market liquidity, secondary market liquidity, lack of depth in the market and a restriction to only investing in indices.

Two-thirds of Australian institutional investors are using ETFs to access Australian equities, international equities and fixed income.

The key uses of ETFs by institutions are strategic asset allocation, tactical asset allocation and cash equitisation, according to the survey.

A majority of Australian institutions make ETF trades of below $10 million, while 6 per cent of institutions use them to make trades of between $200 million and $500 million.

Read more:

New ASIC guidance released for REs

Legg Mason hires key account manager

HHV shareholders advised to reject WAM offer

Government closes client money loophole

Willis Towers Watson acquires actuarial business

 

Australian institutions warming to ETFs
investordaily image
ID logo
promoted stories

Appointments

investordaily image

AMP names incoming chief risk officer

Jessica Yun

investordaily image

Antares Equities hires new director

Staff Reporter

Brad Fox

Former AFA CEO appointed to boutique board

Staff Reporter

Analysis

ST Wong

Busting common passive investing myths

ST Wong

investordaily image

The long-term case for real estate

Chris Bedingfield

investordaily image

Shining a light on investment options

Stuart Hoy