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ETF investors opt for 'brand name' index
28 August 2013
IndexUniverse survey finds investors value underlying indices
ETF investors place a significant value on the product's underlying indices, IndexUniverse and Brown Brothers Harriman have found.
In preliminary result of the two firms' Annual Advisor Survey, to be published in full in September, they found half (50%) of respondents felt the index brand to be of “equal or greater importance” to the ETF brand itself.
Some 53% of respondents said they would pay a premium of “at least 6 extra basis points” for an emerging markets ETF underpinned by a 'brand-name' index.
They survey of 1,000 respondents found that only 13.5% of ETF buyers thought the underlying index was not important, while in terms of costs, trading spreads were the least important consideration, with the ETF’s strategy the most important factor.
The survey found that equities were felt to be the important asset class for ETFs, with 50.3% of investors, followed by 19.6% for fixed income.
The survey also showed the strong equity run is set to continue, with 41% of advisors expecting to increase client allocations to equities over the next six months.