Wealth managers use sector ETF strategies, survey finds

More than half of UK wealth managers use sector exchange-traded fund (ETF) investment strategies, research has revealed.

According to a survey by State Street’s ETF business, SPDR, one in five of those questioned said they used them more today than 12 months ago and 44% expected sector ETFs to be used more over the next 12 months. 

When choosing a sector ETF, 40% of wealth managers interviewed cited liquidity as the most important selection criterion.

The survey of over 50 wealth managers found that almost a third cited the financial strength of the provider as the most pivotal factor, with an equal quantity saying the total expense ratio of the ETF was the key consideration and 6% describing the longevity of the ETF as ‘most important’ input to their buying decision.   

Wealth managers cited healthcare as the most attractive sector, selected by 47% of investors. This was followed by technology, energy and utilities.

Among those wealth managers who are already using sector investment strategies, two in five said that they did so because, compared to other investment styles, discrete sector exposures offer a wider dispersion of returns. 

Claire Perryman, UK head of SPDR ETF at State Street Global Advisors, said: “The Trump election was a watershed moment for European investor attitude to sector ETF investing.”

She added: “The market quickly identified potential winners and losers emerging from the changing political landscape, and assets flowed into ETFs accordingly.”

©2018 funds europe

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