Registered investment advisors have been growing increasingly fond of exchange traded funds in recent years, according to research by Cerulli Associates.

Registered investment advisors have been growing increasingly fond of exchange-traded funds in recent years, according to research by Cerulli Associates.

Cerulli’s RIA Marketplace 2013: The Changing Landscape of a Maturing Industry report found that advisors’ use of ETFs has grown by nearly 27 per cent annually over the past five years in the US, with the firm projecting a continued increase.

The growing popularity for ETFs is not unexpected; over the past few months firms such as BMO Asset Management and Deutsche Asset and Wealth Management rode the crest of the ETF wave by launching new new products themselves.

Popular among investors for an easy method of asset diversification, ETFs are now covering a variety of investment strategies. RIAs expect more investors to jump on ETFs to broaden their portfolios.

In a particularly successful year, allocation to ETFs among RIAs grew 48 per cent between 2011 and 2012, according to Cerulli.

Its report is focused on understanding the dynamics of the RIA channel, highlighting RIA trends for providers and asset managers serving advisors.