60% of Millennials Expect to Increase ETF
Investments in Next Year
Individual investors continue to demonstrate their affinity for
exchange traded funds (ETFs), and ETF adoption appears to be headed
for exponential growth in the years to come, according to the ETF
Investor Study by Charles Schwab & Co., Inc. On average, ETF
investors say more than a quarter of their portfolios (27%) are
currently in ETFs, up from just 16% in 2012. Looking ahead, more
than four in 10 ETF investors (42%) say ETFs will be the primary
investment vehicle in their portfolios in the future – a sharp
increase from 2016 (28%) – and investors expect to have one-third
(33%) of their portfolios in ETFs in five years.
This seventh annual survey explores the attitudes and behaviors
of more than 1,200 ETF investors, more than one-third of whom said
they would put more than $50k into ETFs if given an extra $100K to
invest today, up from 28% who said the same thing last year.
“It has been fascinating to watch attitudes toward ETFs evolve
over the seven years we’ve done this survey,” said Heather Fischer,
Vice President, ETF & Mutual Fund Platforms at Charles Schwab.
“Each year, investors tell us that ETFs play an even greater role
in their portfolios, and all signs point to that growth
continuing,” she observed. “As investors have become more familiar
with the versatility of ETFs, their confidence levels have grown.
Half of ETF investors consider their understanding of ETFs at an
intermediate level, and almost all (93%) are now fully confident in
their ability to choose an ETF that is right for their investment
objective,” she noted.
Millennials are ETF obsessed
A generational breakdown of the survey data shows that more than
half of Millennials (56%) say ETFs are their investment vehicle of
choice, more than any other generation. Sixty percent of
Millennials surveyed expect to increase investments in ETFs in the
next year, and most (63%) expect ETFs to be the primary investment
vehicle in their portfolio in the future.
Nearly 60% of Millennials say they use ETFs to reach long-term
goals such as building wealth and saving for retirement, which is
consistent with older generations. However, Millennials are much
more likely to consider holding only ETFs rather than solely
investing in individual securities.
All ETFInvestors
Millennials Gen X Boomers
Matures ETFs are investment vehicle of choice
42% 56% 44% 30% 23%
Expect to
increase investments in ETFs in next year 45% 60%
48% 29% 25%
Expect ETFs to be primary
investment vehicle in the future 42% 63%
45% 23% 17%
Use ETFs to reach long-term goals
59% 59% 58% 59% 57%
Would
consider holding only ETFs instead of individual securities
43% 62% 47% 24% 23%
“Millennials continue to lead the charge when it comes to ETF
adoption,” said Fischer. “Millennials have grown up with ETFs, and
because of this familiarity they seem to be more comfortable than
other generations in embracing them as their investment vehicle of
choice – and enjoying the benefits of low costs, tax efficiency and
transparency.”
ETF investors test the waters with socially responsible
investing (SRI)
While only one in 10 ETF investors is currently invested in
socially responsible investments, there appears to be growing
interest in these strategies. Almost half of ETF investors (46%)
believe it is important to invest in socially responsible funds
because they want their investments to align with their beliefs,
and half (51%) would invest more in these strategies if more SRI
product education was offered.
Socially responsible investing has already gained traction among
Millennial ETF investors, with almost half (48%) actively seeking
out funds that use SRI strategies, and 63% saying they believe SRI
strategies can help them reach their investing goals.
All ETFInvestors
Millennials Gen X Boomers
Matures Actively seeks out funds that use SRI
strategies 30% 48% 32% 14%
9%
It’s important to invest in socially responsible funds
because I want my investments to align with my
beliefs/interests 46% 60% 50% 36%
27%
I think SRI strategies can help me reach my investing
goals 47% 63% 50% 36% 23%
Cost is king
When choosing an ETF, investors prioritize a low expense ratio
(62%) and total cost (60%) above all else. When evaluating
brokerages, the importance ETF investors place on the ability to
trade ETFs commission-free has risen significantly over the last
five years. Fifty-five percent said the ability to trade ETFs
without commissions or other brokerage fees is the most important
or a very important consideration, compared to 38% in 2012.
“ETF investors continue to demonstrate a strong desire for
cost-effective ways to meet their investing goals,” Fischer said.
“While costs have been trending downward across the industry, it’s
clear that ETF investors still keep an eye on what they’re
paying.”
About the Study
The 2017 ETF Investor Study by Schwab is the seventh installment
of an annual online survey of more than 1,200 individual investors
between the ages of 25-75 with at least $25,000 in investable
assets who have purchased ETFs in the past two years. Conducted by
Koski Research from June 6 – July 15, 2017, the study has
approximately a three percent margin of error. Survey respondents
were not asked to indicate whether they had accounts with Schwab.
All data is self-reported by study participants and is not verified
or validated.
About Schwab
At Schwab, we believe in the power of investing to help
individuals create a better tomorrow. We have a history of
challenging the status quo in our industry, innovating in ways that
benefit investors and the advisors and employers who serve them,
and championing our clients’ goals with passion and integrity.
A leader in the retail ETF market, as of June 30, 2017, Schwab
had $355 billion in ETF assets custodied on its platform. More
information is available at www.aboutschwab.com. Follow us on
Twitter, Facebook, YouTube and LinkedIn.
Disclosures
Through its operating subsidiaries, The Charles Schwab
Corporation (NYSE:SCHW) provides a full range of securities
brokerage, banking, money management and financial advisory
services to individual investors and independent investment
advisors. Its broker-dealer subsidiary, Charles Schwab & Co.,
Inc. (member SIPC, www.sipc.org), and affiliates offer a
complete range of investment services and products including an
extensive selection of mutual funds; financial planning and
investment advice; retirement plan and equity compensation plan
services; compliance and trade monitoring solutions; referrals to
independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based
investment advisors through Schwab Advisor Services. Its banking
subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing
Lender), provides banking and lending services and products. More
information is available
at www.schwab.com and www.aboutschwab.com.
Brokerage Products: Not FDIC Insured • No
Bank Guarantee • May Lose Value
Investment returns will fluctuate and are subject to market
volatility, so that an investor’s shares, when redeemed or sold,
may be worth more or less than their original cost. Unlike mutual
funds, shares of ETFs are not individually redeemable directly with
the ETF. Shares are bought and sold at market price, which may be
higher or lower than the net asset value (NAV).
© 2017 Charles Schwab & Co., Inc., All rights reserved.
Member SIPC
(0917-7FUR)
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170907005005/en/
Charles SchwabKaitlyn Downing,
212-403-9240kaitlyn.downing@schwab.com
Charles Schwab (NYSE:SCHW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Charles Schwab (NYSE:SCHW)
Historical Stock Chart
From Apr 2023 to Apr 2024