One of the key providers of ETPs in Europe, Source, has published new research which reveals more than two-thirds (68 per cent) of professional investors and advisers in Europe are currently using ETPs in the portfolios they manage, while a further 22 per cent have used them in the past.
The survey was conducted among more than 750 professional investors and advisers based in 11 European countries. Each of those interviewed are responsible for at least GBP50 million worth of private client investments or GBP100 million of institutional assets.
When asked what products were most likely to be in their top three holdings, ETPs were mentioned first by 34 per cent of respondents. This was the highest percentage with “first mentions”, with the second highest being traditional UCITS funds, which garnered 29 per cent of responses. In total, two-thirds said that ETPs were among the top three products used.
The biggest users of ETPs are professional investors and advisers based in Switzerland, where 87 per cent currently use them. This is closely followed by Israel where the corresponding figure is 86 per cent. Spain had the lowest percentage of professional investors and advisers using ETPs at 40 per cent.
Overall, investors estimate that around 10 per cent of the assets they help manage are in ETPs. 78 per cent of those interviewed said they do not plan to use these products less, and 39 per cent intend to use more over the next 12 months. In Israel, 78 per cent of respondents said they plan to use them more in the next 12 months, followed by 56 per cent of those in Austria, 49 per cent in Switzerland and 42 per cent in the UK. Only 14 per cent of investors and advisers in Spain intend to use more ETPs over the next year, the lowest of all the countries surveyed.
The research also found that, on average, investors have between three and four different types of ETPs in the portfolios for which they are responsible. Of those using them, 71 per cent said they are utilising pure tracker products, and 40 per cent said they are using actively managed ones. Overall, the findings reveal an expected net increase of 32 per cent in the use of tracker ETPs over the next year, whereas the corresponding figure for actively managed ETPs is 6 per cent.
Peter Thompson, President of Source, says: “We wanted to gauge the experiences of using ETPs in different markets, and our survey uncovered many meaningful differences. Overall the findings suggest that the European market for ETPs still has significant room for growth and that they remain popular investment vehicles.
“Drilling down into the data provides valuable insights”, continues Thompson, “and these have important implications in terms of how ETPs are developed to meet the needs of investors in each country.”