Global ETF investors now rank historical fund performance on par with expense ratio when selecting an ETF, according to Brown Brothers Harriman & Co’s 6th annual ETF investor survey.
The survey, which measured the expectations and preferences of 300 institutional investors, financial advisers, and fund managers from around the world, also found that investors are placing greater importance on ETF issuer than they have in years past. This year, BBH combined what was previously a regional breakdown into a single global survey of ETF investors in the United States, Europe, and Greater China.
“We are seeing global ETF investors giving historic returns equal consideration to cost when selecting an ETF. That’s in stark contrast to last year when investors in the US and Europe stated cost was the top factor,” says Shawn McNinch, Global Head of ETF Services at BBH. “While much has been said about the low-cost nature of ETFs, our survey finds that professional investors are looking beyond the lowest-cost products and seeing tactical vehicles like smart beta and active ETFs as ways to bolster returns or mitigate risk, especially in periods of heightened volatility.”
“We’re 25 years into the ETF revolution, and investors are clearly becoming more sophisticated in their use of ETFs,” says Dave Nadig, Managing Director of ETF.com. “Whether it’s Smart Beta, active management or just a willingness to use brand new products, it’s clear this is a robust and maturing market.”