Sixty-four percent of investors want to move assets from mutual funds into exchange traded funds (ETFs), a Spectrem Group Perspective report said.
The Perspective looked at investors’ plans for ETFs, which are seen as an alternative investment to mutual funds. The investors were separated in the study by age, wealth, and investment aggressiveness.
Twenty-eight percent of investors owned ETFs, while 84 percent owned mutual funds. Forty-five percent of investors who considered themselves very knowledgeable investors owned ETFs, while only 13 percent of those who considered themselves not very knowledgeable owned ETFs.
Investors answered only those questions that applied to their investment ownership.
Sixty-four percent of investors who own mutual funds said they were likely to move some of those funds into ETFs. That number jumped to 72 percent for the Mass Affluent ($100,000 to $999,999 net worth not including primary residence), and 78 percent for those investors between the ages of 55-64.
On the other end of the spectrum, only 50 percent of conservative investors said they would move assets from mutual funds to ETFs.
Among those investors with ETFs, 35 percent said they were likely to move assets from ETFs to mutual funds, and that number jumped to 62 percent of ETF owners that were conservative investors.
Over the next 12 months, 21 percent of all investors said they were likely to invest in ETFs, and 53 percent said they were likely to invest in mutual funds. Fifty-one percent said they would invest in stocks and 20 percent said they were not going to invest in any of the three choices.
But 32 percent of the Ultra High Net Worth (with $5 million to $25 million net worth NIPR), said they were likely to invest in ETFs. Sixty-seven percent of that segment said they were likely to invest in stocks.
Asked what reasons there would be to redeem ETFs, 55 percent of the study group said underperformance of the fund would cause them to get out. Forty-one percent said they would redeem ETFs because of a more attractive ETF to invest in, and 45 percent of investors 65 years of age and older said they would redeem ETFs on the recommendation of their financial advisor.