Financial advisors plan to increase their use of ETFs in
retail client portfolios next year, according to a survey by
Guggenheim Investments, the investment management division of
Guggenheim Partners. The survey, taken earlier this month at the
Morningstar ETF Invest conference in Chicago, shows 78 percent of
financial advisor respondents plan to boost use of ETFs in client
portfolios next year. Twenty percent are unsure if they will use
ETFs more or less next year and just one percent of those
surveyed anticipate decreased use of ETFs.
The numbers from the Guggenheim survey seem to jibe with a
study released by Invesco (NYSE:
IVZ
), parent company of PowerShares, earlier this month. Registered
investment advisors polled by Invesco believe ETFs will make up
24 percent of portfolio allocations over the next 12 months and
33 percent over the next three years, representing a 10 percent
increase over results reported in Invesco's survey of RIAs in
201,
according to the Invesco survey
.
"The results from the survey at Morningstar indicate a growing
appetite amongst financial advisors to incorporate ETFs into
retail investors' portfolios over the next year," said William
Belden, Director of Product Development at Guggenheim
Investments, in a statement. "While the anticipated tax changes
in 2013 may not have an immediate impact on ETF industry growth,
there will be implications for how advisors are managing their
clients' portfolios. The potential benefits of fixed income
ETFs, such as liquidity and convenience, will be a significant
impetus to advisors' increased usage of fixed income ETF."
Over 70 percent of those polled by Guggenheim said convenience
and liquidity are the primary reasons for incorporating fixed
income ETFs into client portfolios while 16 percent of financial
advisors cite low costs as the biggest advantage, the remaining
thirteen percent say transparency and tax advantages are the
biggest benefits of using fixed income ETFs in retail client
portfolios, according to the statement.
Guggenheim is the eighth-largest U.S. ETF issuer with $11.7
billion in assets under management as October 24,
according to Index Universe data
. Popular Guggenheim ETFs include the Guggenheim China Small-Cap
ETF (NYSE:
HAO
), which has over $214 million in assets under management and the
Guggenheim Multi-Asset Income ETF (NYSE:
CVY
), which has almost $780 million in AUM. The firm also owns a
suite of popular equal-weight ETFs that were formerly branded
under the Rydex name.
For more on ETFs, click
here
.
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