Investment Trends’ 2021 ETF Investor and Adviser Report found that the number of ETF investors jumped up by 33 per cent in the past year to over 1.7 million, while another 275,000 intend to start using ETFs in the next 12 months.
The number of investors using ETS in core portfolio allocation is also on the rise with 27 per cent doing so in 2021, up from 16 per cent in 2020 and 4 per cent in 2019.
“ETF adoption reached new highs in 2021 among both investors and advisers,” Investment Trends’ head of research, Irene Guiamatsia, said.
“Whether judicious or otherwise, retail investors tacitly associate passive investing with a cautious approach.
“The (ongoing) market turbulence certainly appears to have propelled a product that already had strong wind in its sails.”
The rise in ETF adoption has also been particularly strong in younger female investors, with the research showing 21 percent of new investors are females aged between 18 and 24 years old.
Ms Guiamatsia said this presents yet another opportunity for advisers in the ETF space.
“Young women are on a mission to close the gender investing gap and determined to take charge of their financial future,” she said.
“They are eager to grow their knowledge and skills, highlighting education opportunities for issuers, financial advisers and investing platforms.”
Hopefully advisers realise the implications of a rising rate cycle.