Fund managers to use more ETFs in future

Fund managers are to increase their use of exchange-traded funds (ETFs) and exchange-traded products (ETPs), according to a survey commissioned by Lyxor, itself an ETF provider. According to the research, 54% of fund managers plan to increase their use of ETFs and ETPs, and almost a quarter of them expect at least a 10% rise in these assets. At present, 81% of managers have less than 10% of their funds in ETFs and ETPs, with 6.3% of managers with over 30% of their funds in these products.

Lyxor said that only 5.8% of managers said that they were “very concerned” about the risks associated with ETFs and ETPs, and 69% said that the products needed as much due diligence work as traditional mutual funds. In terms of the most important factors when selecting an ETF, low tracking error, liquidity and counterparty risk of less than 10% were seen as the three most important factors.