Investors look to ETFs for tactical exposure to markets

Mar 30th, 2012 | By | Category: ETF and Index News

New research from SPDR ETFs, the ETF platform of State Street Global Advisors (SSgA), shows that investors are primarily using ETFs for gaining tactical exposure to certain markets and asset classes.

Research shows investors look to ETFs for tactical exposure to markets

Respondents ranked market access as one of the top three most important benefits of investing in ETFs along with cost effectiveness and liquidity.

Gaining market access is considered to be one of the most important benefits of investing in ETFs, alongside cost-effectiveness and liquidity, according to the research which was conducted among 354 fund buyers.

The study found that just over half (52.7%) of all respondents use ETFs to gain tactical exposure to specific markets, while one in five (21.1%) uses them as core / satellite building blocks and 16.8% use ETFs as core holdings.

The research highlighted that investors are using ETFs most commonly to access broad equities, commodities and emerging markets.  Of those wealth managers investing in equities and commodities 75.7% and 85.9% respectively are doing so through ETFs.

Similarly, 96.2% and 90.1% of global fund selectors investing in equities and commodities access these markets through ETFs.  Almost two-thirds (64.4%) of global fund selectors investing in emerging markets are doing so through ETFs.

The role ETFs play in terms of tactical asset allocation was also highlighted by the responses of those surveyed regarding the most important benefits of investing in ETFs.  Respondents ranked market access as one of the top three most important benefits of investing in ETFs along with cost effectiveness and liquidity.

Commenting on the findings Eleanor Hope Bell, head of SSgA’s Intermediary Sales for the UK, said: “This research highlights the dynamic way managers and fund selectors are using ETFs within their investment portfolios. It is also interesting to see investors starting to look beyond broad equities and emerging markets into other categories like fixed income and dividend strategies. ”

Hope Bell added: “The findings validate our belief that investors are not only expanding the way in which they use ETFs, but also broadening the asset classes to which they are gaining access through ETFs. As a leading provider we consistently look to deliver more options within our product range that aim to allow investors to gain efficient access to markets and asset classes as their allocation decisions dictate.”

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