Respondents represented a variety of investor types with the biggest group being single/multi-family offices at 26.4%, financial advisers at 21.7% and asset managers at 19.9%, according to the survey. The primary respondent locations were Europe-Middle East at 49.6%, North America at 38.7% and Asia-Pacific at 6.7%, the survey said.
"The ETF industry is anything but dull, innovating every year," wrote Philippe Malaise, Trackinsight's CEO, in a foreword to the survey. "The rise of active ETFs is the genuine prevailing trend that is shaping the industry's future."
More than 73% of respondents reported either current investment or a keen interest in active ETFs, the survey said.
Malaise added that amid the backdrop of the "significant" generational wealth transfer, "there is a robust momentum in the adoption of ETFs, with a notable shift and increasing transition from mutual funds to ETFs."
Indeed, 80.1% of respondents said they would be more inclined to invest in an active strategy if packaged as an ETF rather than a mutual fund, the survey showed. The survey also cited recent regulatory filings in the U.S., which it said were seeking approval to "launch active ETFs as a share class of an existing mutual fund."
The survey said that a "substantial majority (81.9%) would be inclined to transfer an existing mutual fund holding to an ETF share class if a tax-free exchange were available, emphasizing the attractiveness of the ETF structure's tax efficiency."
When it comes to ETFs with an environmental, social, and corporate governance focus, "Europe still reigns," the survey said.
Global net inflows into ESG ETFs reached a zenith of $165 billion in 2021, the survey said. During that peak, Europe, Middle East, and Africa regions contributed $109 billion of net inflows, while North America also saw a "significant increase" with about $51 billion.
However, the upward trajectory in North America "altered noticeably in the ensuing years," according to the survey, which said ESG ETFs in that region had net outflows in 2023 totaling about $1.31 billion. That contrasted sharply with the steady growth in EMEA, which saw close to $50 billion of net inflows into ESG ETFs during the same period.
"The drop in ESG investing, especially in the U.S. over the past couple of years, can be traced back to several factors, with a key one being the increase in anti-ESG legislation mainly driven by political changes," Trackinsight's survey said.
However, analyzing the North America region's 2023 net outflows "reveals a distinct pattern: $6.6 billion in outflows predominantly came from passive funds, while active ESG ETFs were on demand, attracting $5.3 billion in new capital," the survey said.
"This shift indicates an increasing preference for active management in ESG investing," the report said.