Fees and specific benchmark exposure were the top two reasons advisors use ETFs with 58% and 56% of responses, respectively.
With over 80% of respondents utilizing ETFs, 2013 saw the trend towards adoption of ETFs slowing as fewer managers indicated they would increase their ETF usage than in previous surveys.
Over half of respondents indicated that they utilize Morningstar.com for their ETF research and 30% said they use Morningstar’s ETF specific research; these numbers are up from 41% and 24% in 2011, respectively.
Overall numbers demonstrate a clear trend towards stabilization in the usage of new exchange traded funds in 2013 with RIAs citing the use of ETFs as core portfolio positions as their dominant implementation.
Only 11% and 10% of advisors stated they have below average knowledge of ETF liquidity and ETF trading, respectively, while intraday indicative value calculation and distribution schedules are both notable areas for improvement in advisor knowledge.
The change in the fraction of RIAs reporting above average knowledge was flat for all categories. Knowledge of ETF liquidity increased by almost one tenth since 2011; up from 49% to 53% in 2013.
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