Just one in five, or 22%, of UK retail investors currently invest in exchange-traded funds (ETFs) or exchange-traded products (ETPs), with education found to be the main barrier, according to new research.
The survey of 1,000 UK retail investors commissioned by WisdomTree found that of those who didn’t invest in ETFs or ETPs, 34% said it was because they didn’t understand them.
The survey, which was conducted by Opinium, noted that European ETP assets under management had risen to $1.6 trillion in 2021, citing the popularity of their low-cost and transparency.
However, the trend has yet to be mirrored among UK retail investors with 19% of the surveyed group not having even heard of ETFs and ETPs.
WisdomTree’s survey did find that popularity was rising, especially among those aged 18 to 34, with 34% of that age group investing in ETFs and ETPs compared to only 5% of those over the age of 55.
Furthermore, 35% of those surveyed said they would be interested in receiving education about ETFs and ETPs from their investment platform and online broker.
The survey revealed that investors, in general, are eager for investment research and educational content, with 77% willing to consider a new investment platform or online broker if it offered a wider range of research and educational material.
The enthusiasm for research and education comes as 48% of respondents said that a global recession was the biggest risk to their investments and 40% said inflation.
Adrià Beso Marco, head of platforms distribution, sales, Europe at WisdomTree, said: “Despite the large growth in demand for ETFs and ETPs by professional investors, uptake has been slower in the retail market, and particularly in the UK when compared with other European countries like Germany.
“Confidence in knowing how and why to invest in ETFs and ETPs is low, leading to a lack of investment despite the fact they are easily traded, offer diversification and more transparency, and are low cost, all of which are important in the current economic backdrop.”
© 2022 funds europe
