ETF News

Survey: 94% of IFAs to increase ETF use

The use of exchange traded funds (ETFs) among UK-based independent financial advisers (IFAs) is set to &;quot;boom&;quot;, with 94 per cent saying they intend to increase their use of the investment vehicles over the coming year.

According to a poll by iShares and independent wrap platform Ascentric, 38 per cent of IFAs currently use ETFs, with around half of these advisers employing them on a regular basis.

ETFs allow investors to track an index, commodity or a basket of assets through a single security that trades on an exchange like stock.

Some 39 per cent of current ETF users said they are employed for strategic asset allocation, while another 32 per cent said they provide core market exposure for their portfolios.

Over the next 12 months, more than nine out of ten of all the IFAs polled plan to increase their use of the funds because of their low cost structure, the precise nature of their market exposure and their high levels of transparency.

At the end of Q2 2009, there were 1,707 ETFs trading on 42 exchanges worldwide. The funds had combined assets of $789.04 billion.