Over half of advisers keen to use more smart beta ETFs
Advisers are keen to increase their usage of smart-beta exchange traded funds (ETFs) with 56% saying they plan to use them more in the next 12 months as awareness grows of the sector.
A survey of 532 advisers in Australia found the number using ETFs in client portfolios had risen from 83% in 2016 to 87% this year.
Over half of advisers said they used smart beta ETFs as a substitute or replacement for active management and 47% said they used them instead of passively-managed funds. Some 77% used smart beta strategies for global equities and 70% used them to invest in Australian equities.
Awareness of the sector had grown significantly among advisers in recent years with 94% of respondents aware of it compared to 81% in 2016.
Across the ETF industry, one in four products were smart beta strategies
Arian Neiron, VanEck managing director and head of Asia Pacific, said: “The majority of advisers plan to increase their use of smart beta strategies in the next year and we are seeing very clear reasons why. The underperformance by active fund managers is contributing to the shift to ETFs, as well an increased awareness of ETFs in the financial services community. At the same time, we are seeing financial advisers turn away from more expensive actively-managed funds.
“Smart beta is a huge part of the disruption active managers are facing, and ETFs have democratised the opportunity and encouraged investors to employ smart beta in their portfolio construction.”
AUTHOR
Laura Dew
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