Almost half of money management firms (48%) and about a third of institutional investors plan to increase their allocations to ETFs by 2013, according to a survey by Greenwich Associates and BlackRock.
Andrew McCollum, Greenwich Associates consultant and co-author of the report, said in a telephone interview that not one of 25 money management firms surveyed by Greenwich plan to cut their ETF allocations over the next two years and less than one in 10 institutional funds plan to reduce their ETF allocations over the same period.
Fifty-three percent of money managers surveyed said they use exchange-traded funds for active exposure to international equities, while 43% use them for active exposure to domestic equities. Institutional investors were less likely to aim for active exposure through ETFs, with 23% looking to gain active exposure to domestic equities and 15% looking to gain exposure to international equities.
Also, 75% of money managers use ETFs for rapid exposure to an asset class; 30% for hedging and 20% for portfolio completion. Among institutional investors, 63% use ETFs for transition management.
The survey was conducted from February to April.