Allocations to ETFs are expected to increase globally over the coming 12 months as thematic investing comes more into focus, a report has suggested.
Over 70% of investors across Europe, the US and China planned higher exposure to ETFs, according to a survey of nearly 400 institutional investors, financial advisors and fund managers carried out by Brown Brothers Harriman (BBH).
Following on from a rise in demand in 2020, 80% of respondents were looking to have more exposure to thematic ETFs driven in partly by a rise of ETF strategies investing in areas such as robotics and digital assets.
The report also said thematics showed resilience through the pandemic-induced volatility witnessed last year.
Shawn McNinch, global head of ETF services at BBH, said: “The resiliency of the ETF structure and supporting capital market infrastructure saw them not only weather the storm but cement their status as a go-to option for investors to trade, especially in times of market stress.”
Over 65% of respondents said they also planned to increased bond ETF allocations this year, while 42% said they will buy bond ETFs in periods of heightened volatility where the ETF offered transparency and liquidity.
Active ETFs were also seen to be growing in popularity, with 65% of respondents looking to increase exposure to them – up from 57% last year.
In Europe, the ETF industry closed 2020 by passing the €1 trillion milestone in assets, while ESG-focused funds saw their assets surge, according to data published by Morningstar earlier this year.
Thematic ETFs were also said to be the “big winners” of last year.
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