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.
Good governance v resources
UCITS rules need changing
Old age dependency ratio ‘outdated’
Scope for change post-Brexit
To tackle liquidity issues