Some 54% of fund managers are set to increase their exposure to ETPs and ETFs over the next three years, with a quarter anticipating an increase of 10% or more.
A majority of 81.3% of fund managers surveyed currently have less than 10% of their funds in these products, with only 6.3% of managers with 30% or more, according to research from ETF provider Lyxor.
According to the 131 fund managers surveyed, the three most important factors when selecting an ETF are low tracking error, with 67.8% saying that was the most important criteria.
This was followed by liquidity (65.3%), and having a counterparty risk of less than 10% (56.2%).
Despite fears being raised about the ETF market, only 5.8% of fund managers are ‘very concerned' about the risks posed by these products.
A total of 70% said as much due diligence resource should go into selecting ETFs and ETPs as traditional mutual funds.
Bought plans in 1988 and 1989
To be added to model portfolio service
Launched 25 September