ETFs have surged around the world as their low-cost fee structure and ability to capture exposure to markets/sectors in one hit have appealed to clients dissatisfied with the costs and performance of conventional mutual funds.

Three-quarters of investors in mainland China, Hong Kong and Taiwan expect the use of exchange-traded funds to grow from its still-nascent status, a survey from Brown Brothers Harriman finds. In other details, it showed that 76 per cent of investors prefer digital to face-to-face meetings, showing how the pandemic and technology affect the way in which people interact.

The study, based on responses from 103 institutional investors, advisors and fund managers, shows that at a time of market volatility, 85 per cent of investors prefer managed risk strategies. They want to spread risk by holding defined outcome ETFs and dividend/income ETFs. Investors lean towards fixed income: exactly half of investors in Greater China plan to boost allocations to fixed income ETFs over the next 12 months.

ETFs have surged around the world as their low-cost fee structure and ability to capture exposure to markets/sectors in one hit appealed to clients dissatisfied with the costs and performance of conventional mutual funds. ETFs boomed particularly in the bull market run after 2009 when more actively managed funds’ fees appeared harder to justify.

Interest in thematic ETFs continues to rise, with more than 90 per cent of investors wanting to maintain or raise exposures.

Some 59 per cent of respondents oversee more than $1 billion in assets.

The number of investors with more than 25 per cent of their portfolio invested in ETFs is up 11 per cent from 2022.

More investors in the region plan to allocate than those in the US and Europe (62 per cent in Greater China against 45 per cent in the US and 44 per cent in Europe).