Big investing firms kept pouring money into ETFs in 2018, and a survey of their leaders found three major reasons the trend should continue.
So the institutions were attracted to the ease and speed of trading ETFs. The funds were attractive for risk management purposes because they're liquid, low-cost, and transparent compared to other types of investments.Institutions also found ETFs to be a good way to get exposure to different stock and bond indexes. They were especially willing to use ETFs to replace active and index mutual funds, but many also switched toward ETFs and away from individual bonds and stocks.
Greenwich Associates Managing Director Andrew McCollum says the institutions may have been disappointed in returns from active managers during the market turmoil of late 2018. That's when active management is supposed to be most valuable, but if they weren't satisfied with their returns,Big institutions are finding they can use ETFs for a wide variety of purposes including changing tactics, rebalancing their portfolios and choosing new core assets.
This chart illustrates the huge variety of reasons the institutional investors gave for buying ETFs and how they've changed in the last year.Greenwich Associates surveyed 181 investment managers, institutional funds, insurance companies, investment advisers and others. Most had at least $5 billion in assets under management.
Greenwich said the shift into ETFs might slow down somewhat, but very few of the surveyed funds said they plan to reduce their exposure to ETFs in 2019. And of the funds that aren't currently investing in ETFs, most said they weren't doing so because they're currently prohibited from buying them — something that could change, unleashing even more pent-up demand.simply click here to claim your deal and get access to all exclusive Business Insider PRIME content.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Kevin O'Leary says it's a 'big mistake' not to own this group of stocksChinese markets are having their best quarter in years. Kevin O'Leary, chairman of O'Shares ETFs and co-host of 'Shark Tank,' says exposure to the Asian markets is essential.
Read more »
Millennials Need To Start Investing, And Firms Are Making It Easier Than EverMillennials need to start investing, because time is on their side. And more investment firms are creating technologies to make it easier than ever to invest.
Read more »
The depressing reason why having kids doesn’t actually make you happierA new study examined the ‘puzzle’ of children and unhappiness.
Read more »
Coke vs. Pepsi: If you invested $1,000 10 years ago, here's how much you'd have nowCoke vs. Pepsi: If you invested $1,000 10 years ago, here's how much you'd have now via CNBCMakeIt
Read more »
Pension Funds Investing In Crypto Is A Big DealGetting pension funds to invest in crypto is a BIG step! This important development could unleash a flood of money into cryptocurrencies and the technology supporting them. I'm still skeptical, but this is the first thing in 18 months that has made me revisit my bearish view.
Read more »
'I am ashamed’: Michael Cohen seeks redemption as he torches TrumpCohen testified that Trump knew about plans to dump Democratic emails during the 2016 presidential campaign, as well as the Trump Tower meeting in June 2016
Read more »
Michael Cohen: 'I am ashamed because I know what Mr. Trump is'The president's former lawyer and fixer reveals documents he says show Trump’s net worth, as well as receipts of payments to Stormy Daniels.
Read more »
Cohen: I am partially responsible for 'silly' behavior in Congress todayMichael Cohen, President Trump's former fixer, testifies before the House Oversight Committee in a public hearing. Watch the live stream and follow here for the latest.
Read more »