While financial advisors are more likely to use mutual funds than exchange-traded funds to access alternative investments, ETFs are quickly gaining ground, a new report reveals.
Cogent Research Cambridge, Mass., published this finding in a summary of results from a study, “2012 Alternative Investment Trends Report.” The survey is based on a nationally representative sample of 1,741 retail investment advisors.
The survey reveals that more than three quarters of respondents (78%) currently prefer to access alternative investments through mutual funds versus 6 in 10 (59%) who favor ETFs. But among advisors who currently access alternative assets or strategies, 29% expect to increase their use of ETFs for these purposes.
Additionally, report reveals, alternative investors who aren’t currently tapping ETFs to meet their alternative investment needs are twice as likely as mutual fund non-users to begin doing so over the next two years (17% versus 9%, respectively).
“Advisors continue to flock ETFs that access alternative investments for the same reasons they seek this vehicle in traditional asset classes: cost-efficiency, liquidity and transparency, says Steven Sixt, Cogent’s senior project director and the study’s co-author.