The EDHEC European ETF Survey 2012

Noël Amenc, Felix Goltz, Nicolas Gonzalez, Nikhil Shah: The present survey has been conducted as part of the Amundi ETF "Core-Satellite and ETF Investment" research chair at EDHECRisk Institute.

Author(s):

Noel Amenc

Professor of finance at EDHEC Business School and director of EDHEC-Risk Institute.

Felix Goltz

Head of applied research at EDHEC-Risk Institute and research director at ERI Scientific Beta.Nicolas GonzalezSenior quantitative analyst at EDHEC-Risk Institute.

Nikhil Shah

Senior research analyst at EDHEC-Risk Institute.

The objective of this research chair is to provide research insights into the recent development of exchange-traded funds (ETFs) and the ways they are used in core-satellite asset management. Since indexing and dynamic asset allocation represent a considerable share of our asset management research, it is natural for EDHEC-Risk Institute to devote significant resources to this research topic. Having conducted our survey of ETF investors since 2006, we have been able to compare the results of our 2012 survey to previous results. This analysis shows that many long-term trends from previous results are confirmed, but there are also important changes in investor perceptions of specific issues. Our results show that the ETF market is still growing and that it has potential for further growth. We observe increased levels of usage, satisfaction and demand for product development across a variety of asset classes, especially so for ETFs on emerging market equity, ETFs on fixed-income indices and ETFs on new forms of indices. We also find that recent launches of ETFs tracking strategy indices or smart beta indices seem to be blurring the traditional boundaries between active and passive investment. The key requirement for most investors is that an ETF track a systematically-constructed index rather than implementing discretionary investment decisions. However, the increasing breadth of systematic indices now includes strategies which are quite far removed from traditional broad cap-weighted market indices. This year saw the publication of ETF guidelines from the European Securities and Markets Authority (ESMA) which aim to increase levels of investor protection through increased levels of disclosure and transparency. In this year’s survey we therefore posed new questions with regards to some key issues covered by the ESMA guidelines and also investor perceptions with regards to the overall effectiveness of the guidelines. Overall, we found that investors were supportive of the guidelines and felt that they had improved investor protection. In particular, the vast majority of respondents support regulatory requirements for the disclosure of securities lending revenues and costs by ETF providers.

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The EDHEC European ETF Survey 2012...
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Type: EDHEC Publication
Date: le 21/03/2013
Research Cluster : Finance

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