EDHEC-Risk’s annual European ETF Survey highlights ETF investors’ positive outlook

Written on 26 March 2014.

EDHEC Publication

Among the key findings of the 2013 survey:

• Satisfaction has remained at high levels across most asset classes. There have been increases in satisfaction for corporate bond, commodity, real estate and sector ETFs, but satisfaction rates for ETFs based on the most liquid ETF asset classes are far more consistent compared to those based on illiquid asset classes.
• Product development within certain asset classes has driven increases in ETF usage, notably within the Real Estate (5.8 % increase), Hedge Fund (14.8% increase) and Infrastructure (14.8% increase) asset classes.
• More than a quarter (28%) of respondents already use products tracking “smart beta” indices and more than an additional one-third of respondents (36%) are considering investing in such products in the near future.
• Despite the past growth and increasing maturity of the ETF market, ETF investors are still looking to increase or at least to maintain their use of ETFs and have a more favourable outlook for their use of ETFs than for their use of alternative indexing products.
• There is increasing interest among investors for development of ETFs based on alternative forms of indices, with 39% of investors interested in further development in ETFs based on smart beta indices.
• The data shows that respondents are still overwhelmingly in favour of passive, rather than active, ETFs.
• TER, underlying index and bid/offer spreads are the three most important criteria when selecting an ETF.
• 73% of investors agree that the ESMA ETF Guidelines have improved investor protection.

Commenting on the results of the survey, Valérie Baudson, Global Head of ETF & Indexing, Amundi, said, “I note with pleasure that, year after year, investors’ satisfaction with ETFs remain very high and the positive outlook for their future use continues to rise. Interestingly, the latest EDHEC-Risk European ETF survey also shows an increasing interest in the development of ETFs based on alternative forms of indices. Innovation, liquidity and cost efficiency, which are the core principles of Amundi ETF, will remain as drivers of this growing market.”

Professor Noël Amenc, Director of EDHEC-Risk Institute, added, “It is particularly noteworthy this year to observe that a considerable majority of investors consider that the new European regulatory guidelines drawn up by ESMA have improved investor protection for ETF investors. This is an encouraging sign for EDHEC-Risk Institute, because we believe that these guidelines would be usefully deployed by both national and international regulators.”

A copy of the EDHEC-Risk Institute survey can be found here:

EDHEC-Risk European ETF Survey 2013

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