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Self-directed investors driving ETF growth

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Self-directed investors have a greater interest in ETFs than advised investors, according to new findings from Cogent Research released this week.

According to Cogent, self-directed investors’ awareness of several top ETF providers is almost twice that of advised investors. What’s more, while equal proportions of self-directed and advised investors use ETFs, self-directed investors allocate 20 percent more of their portfolio to ETFs.

“Everything we see in the data suggests that there is real ‘home-grown’ passion among investors-both advised and self-directed-for ETFs,” said Christy White, founder and principal of Cogent Research, in a statement. “At the end of the day,” she adds, “providers that are committed to promoting and supporting a dual distribution strategy will prevail in this growing marketplace.”

Additional findings:

  • Among current ETF owners, self-directed investors are far more loyal to their primary ETF provider than are investors who purchase and own their investments through an advisor.
  • Usage of ETFs is expected to increase significantly in 2009 among current owners and non-owners alike. On average, one out of every four (25 percent) current ETF owners plans to increase their ETF holdings. Among self-directed investors, the proportion of likely increased use rises to 35 percent, representing a 40 percent higher increased adoption rate.


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