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GraniteShares reports retail traders switching to ETFs and funds


Retail share traders are increasingly turning to ETFs and funds at the expense of trading individual stocks, according to new research from ETP provider GraniteShares.

Its research found nearly a third (30 per cent) of regular share traders plan to cut investment in individual stocks in the year ahead to concentrate on investments in ETFs and funds. 

Around 16 per cent will invest more in ETFs and funds while 7 per cent will increase investment only in ETFs and 7 per cent in funds exclusively.

The research for GraniteShares, shows ETF investment is growing in popularity. Around a quarter (27 per cent) of regular share traders in the UK currently invest in leveraged or short ETPs. Leveraged long ETPs are more popular with around 9 per cent of regular traders using leveraged long strategies while 4 per cent invest in short ETPs. Around one in eight (13 per cent) say they use both types of products.

Awareness of the ability to short individual stocks using ETPs is high – more than half (54 per cent) of regular share traders say they know about using ETPs to profit from falling share prices. The study found 11 per cent of traders currently own ETFs or ETPs with men (15 per cent) twice as likely as women (8 per cent) to hold them.

Will Rhind, Founder and CEO at GraniteShares says: “There are signs of a growing switch away from investing in individual stocks among regular share traders as they look to other ways of investing such as ETFs and funds.

“It is potentially a sign of the growing maturity of the UK retail trading market with investors who first started trading during the pandemic now looking for other ways to invest their money.

“That is reflected in the demand for products such as short and long ETPs which provide the flexibility needed to help navigate volatile market swings on both the long and short sides.”

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