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How ETF usage differs across Europe

Italians are the most likely to use exchange-traded funds (ETFs) for short-term tactical reasons, while UK and German ETF users are more likely to buy-and-hold, research finds.

Asset manager Vanguard sponsored research across 400 professional ETF buyers across Europe and found 71% of Italian respondents were likely to use ETF for short-terms tactical adjustments, but 85% and 65% of UK and German investors, respectively, would hold ETFs for the longer term.

Overall, just under half of the investors surveyed used ETFs for core buy-and-hold investing.

“Tactical use of ETFs is far from the most popular reason, with only a quarter (24%) using ETFs for this purpose,” Vanguard said. “Despite the perception that ETFs are used for short-term trading, investors in fact recognise them as a long-term investment tool.”

Other findings among Europe’s different ETF investors were:

·     German buyers are the most cost-conscious (38%) when choosing an ETF, whereas Italian (27%) and Swiss (21%) buyers are more benchmark-sensitive.

·     UK buyers, liquidity of the underlying assets (20%) and spread considerations (21%) are more important

·     Use of global rather than regional ETFs is high in Italy (80%) and Germany (59%)

·     In Switzerland and the UK, even though single country exposures are more popular, a significant proportion still take a global approach with ETFs (41% and 51% respectively).

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