Millennials and Gen X leading the trend as
they look to turn savings into investments with simple, low cost
index investing
9 in 10 financial advisors also expect to
use ETFs in investor portfolios in 2017
ETF users tend to be younger, more engaged,
confident and optimistic about their financial futures
Exchange traded funds (ETFs) will play a bigger role in
investment portfolios in 2017, according to data released today by
BlackRock, Inc. (NYSE:BLK). The “BlackRock ETF Pulse Survey,” which
polled advised and self-directed individual investors, shows that
52% of U.S. investors intend to buy an ETF in the next 12 months.
This trend is reinforced by 94% of U.S. financial advisors, also
surveyed, who expect to invest in ETFs in client portfolios in the
coming year. 46% of those new purchases would be funded by cash
savings.
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The survey also reveals that one in four investors already use
ETFs, and that these investors tend to be younger, more engaged in
managing their finances, and optimistic about their financial
futures than the overall investment population. More than 8 in 10
(82%) of financial advisors currently use ETFs in the portfolios
they manage.
“With one-quarter of Americans today already owning an ETF,
these are clearly not niche products,” says Martin Small, Head of
U.S. iShares at BlackRock. “We fielded BlackRock’s first ETF Pulse
Survey to learn not just ‘how many,’ but also to understand who is
driving the growth, and how these individuals and advisors use and
feel about ETFs in the context of their broader investment
mix.”
“What’s encouraging is that people who like ETFs really like
them,” Small adds. “These are confident investors who plan to
continue to put their cash to work in the markets with ETFs, and
expect to keep it there for the long term. Why? Because they have
discovered the beneficial role that low cost indexing, versatility
and choice can play in building an investment portfolio that
focuses on value and quality. Coming off a record year where more
people than ever turned to ETFs, the real opportunity now is to
build on this momentum and help them understand how ETFs can enable
them to become better investors over time.”
Other key findings include:
- ETF investors are generally more active
in the markets and hold less cash (17% cash) in their investment
portfolios compared to non-ETF investors (29% cash).
- Of those currently invested in ETFs,
nine in 10 (90%) intend to allocate new investments to ETFs in
2017, and four in five (79%) feel positive about their financial
future for 2017.
- More Millennials (age 21 to 35) are
currently invested in ETFs than investors on average (33% vs. 25%),
and more likely to be planning to invest in ETFs in the next 12
months (70% vs. 52%).
- About half of investors (47%) do not
have a particular bias toward active or passive investing. Among
those who own ETFs, the majority (87%) say that owning ETFs and
mutual funds together in a portfolio can be beneficial.
Investors and Financial Advisors Value the
Cost Benefits of ETFs But Have Differing Views on Their
Uses
When asked whether they think ETFs are short- or long-term
investments, six out of 10 investors (64%) currently view ETFs as
long-term or both long and short-term holdings, as do 81% of
advisors. The average holding period for ETFs is five years for
both groups.
Investors and financial advisors also recognize the power and
versatility of ETFs as a portfolio tool. Some of the common uses:
increasing diversification, core exposure to large market indexes,
and access to specific sectors. ETFs are being used to replace
individual stocks and to replace mutual funds.
Use of ETFs in Current Investment Portfolio
% of ETF Investors % of
Financial Advisors To increase the overall diversification
in my portfolio 53%
69%
For exposure to large market indices (e.g., S&P 500)
43% 79%
For exposure to a specific sector
(e.g., healthcare, financial services, real estate, tech,
etc.)
36% 78%
As a
replacement for individual stocks 42%
72%
As a replacement for mutual funds
44% 84%
Both individuals and financial advisors rank cost benefits of
ETFs highly, but differ on other top features.
Top 3
features/benefits of ETFs: investors
Top 3
features/benefits of ETFs: financial advisors
Low management fees 30% of investors
Low management fees 58% of
financial advisors Low cost to buy and sell
29% of investors
Ability of ETFs to givespecific
investments
41% of financial advisors
Ability to diversify andreduce risk
23% of investors
Tax advantages relativeto mutual funds
36% of financial advisors
Millennials and Gen X Favor ETFs and Curious
to Learn More in 2017
One quarter of investors took steps to learn about ETFs in 2016,
while eight in 10 financial advisors took steps to learn more about
ETFs. This momentum is expected to increase in 2017 with 49% of
investors planning to learn more about ETFs in 2017.
More Millennials are currently invested in ETFs than investors
on average (33% vs. 25%). Millennials investors (45%) and Gen X
investors (38%) also took the biggest “learning steps” with ETFs
last year, and plan to continue learning more in 2017.
Key ETF topics of interest to investors in 2017 include: ETF
risks (43%) and benefits (40%); how to evaluate (38%) and select
(32%) ETFs that work for their goals; tax advantages (37%); ETF
management fees (28%) and performance (28%).
Total Investors
Millennials
(ages 21-35)
Gen X
(ages 36-51)
Boomers
(ages 52-70)
Silvers
(ages 71-75)
Currently invested in ETFs 25%
33% 26% 24% 22%
Plan to invest in ETFs in the next 12 months
52% 70% 61% 50%
35%
Took steps to learn about ETFs in 2016
28% 45% 38%
24% 16%
Plan to learn about ETFs in
2017 49% 59%
57% 48% 33%
Financial advisors are the top source of ETF information for
older investors, while younger investors rely more heavily on
financial media sources.
Source of ETF
Information
Total Investors
Millennials
(ages 21-35)
Gen X
(ages 36-51)
Boomers
(ages 52-70)
Silvers
(ages 71-75)
Financial Advisor 26% 14%
24% 28% 31%
Market
Commentary/
Financial Media
39% 46% 45%
38% 25%
Web Research 22%
22% 26% 23% 14%
“Investors are clearly hungry to learn more about ETFs, and
financial advisors will continue to play an increasingly important
role in helping investors better understand how they can use ETFs
to achieve growth and their financial goals. ETFs are no longer
just about the S&P 500. There is a breadth of ETF offerings
including bond, single country and smart beta that can play key
roles in a portfolio, and people are keen to know more from their
financial advisors,” says Hollie Fagan, Head of BlackRock’s
dedicated Registered Investment Advisor Channel, Retail Investor
Platforms and Retail Financial Institutions Group.
About BlackRock
BlackRock is a global leader in investment management, risk
management and advisory services for institutional and retail
clients. At December 31, 2016, BlackRock’s AUM was $5.1 trillion.
BlackRock helps clients around the world meet their goals and
overcome challenges with a range of products that include separate
accounts, mutual funds, iShares® (exchange-traded funds),
and other pooled investment vehicles. BlackRock also offers risk
management, advisory and enterprise investment system services to a
broad base of institutional investors through BlackRock
Solutions®. As of December 31, 2016, the firm had approximately
13,000 employees in more than 30 countries and a major presence in
global markets, including North and South America, Europe, Asia,
Australia and the Middle East and Africa. For additional
information, please visit the Company’s website
at www.blackrock.com |
Twitter: @blackrock_news |
Blog: www.blackrockblog.com |
LinkedIn: www.linkedin.com/company/blackrock
About the BlackRock ETF Pulse Survey
The BlackRock ETF Pulse Survey examines the attitudes and
investment behaviors of investors and financial advisors in the
United States. Over 1,410 respondents in the U.S. were surveyed
online in September 2016, including 1,001 investors and 409
financial advisors. The online surveys, which were conducted by
Kantar TNS, one of the world’s largest research agencies, have
margins of error of +/- 2.4 percentage points for the investor
sample and +/- 4.5 percentage points for the advisor sample at the
90% confident level. The BlackRock ETF Pulse Survey is the third in
a series of insight-driven studies fielded by BlackRock including
BlackRock’s Global Investor Pulse Survey and the DC Pulse Survey.
For more information on the BlackRock ETF Pulse Survey click
here.
Carefully consider the iShares Funds' investment objectives,
risk factors, and charges and expenses before investing. This and
other information can be found in the Funds' prospectuses or, if
available, the summary prospectuses which may be obtained by
visiting www.iShares.com or
www.blackrock.com. Read the prospectus carefully before
investing.
Investing involves risk, including possible loss of
principal.
Transactions in shares of ETFs will result in brokerage
commissions and will generate tax consequences. All regulated
investment companies are obliged to distribute portfolio gains to
shareholders. There can be no assurance that an active trading
market for shares of an ETF will develop or be maintained.
Diversification and asset allocation may not protect against market
risk or loss of principal.
This material represents an assessment of the market environment
as of the date indicated; is subject to change; and is not intended
to be a forecast of future events or a guarantee of future results.
This information should not be relied upon by the reader as
research or investment advice regarding the funds or any issuer or
security in particular.
The iShares Funds are distributed by BlackRock Investments, LLC
(together with its affiliates, “BlackRock”).
©2017 BlackRock. All rights reserved. iSHARES and
BLACKROCK are registered trademarks of BlackRock. All other
marks are the property of their respective owners.
iS-20003-0117
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version on businesswire.com: http://www.businesswire.com/news/home/20170118005688/en/
Media:Blackrock, Inc.Theresa McCartney,
646-310-1653Theresa.McCartney@blackrock.com
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