Survey Says: Retail Investors Need An ETF Education

MarketMuse update profiles a recent study done by Fidelity Investments and BlackRock, inc., have discovered a huge reason why retail investors are not comfortable investing in ETFs. The study which survey 1,000 individual investors and 250 advisors found that in order for retail investors to get on board the ETF train, they need some basic ETF education. MarketMuse update is courtesy of Nasdaq’s article, “ETF Watch: Retail Investors Still Shy Away From ETFs“, an a excerpt from the article is below.

The exchange-traded funds or ETFs, are lagging in popularity among retail investors due primarily to the lack of familiarity with the investment products, according to a new study.

While the ETF industry in the U.S. has grow at a breakneck pace to more than $2 trillion in assets in just more than two decades, most of that interest has come from institutional investors.

Two-thirds of retail investors have not yet moved ETFs in their portfolios.

The study revealed that the key to further growth for ETF adoption among retail investors and advisors lies in educating them on ETF basics.

“While ETF investments have more than doubled in the last five years , there is still significant opportunity to raise awareness as more than two-thirds of investors report they have yet to tap the potential benefits of ETFs in their portfolios,” said Andrew Brownsword, SVP Fidelity retail brokerage. “ETF adoption will keep growing.”

The study showed that current ETF owners are increasingly turning to ETFs for long-term holdings, while 80 percent of them see benefit in combining ETFs and mutual funds in a portfolio.

To read the entire article from Nasdaq, click here.

 

 

 

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