ETFs are the tool of choice as investors evolve their portfolios and seek to adopt ESG, long-term themes, and emerging active strategies

March 08, 2021
  • Investor Services
New wrapper innovation, emerging asset classes, and investment strategies demonstrate that “there’s an ETF for that.”

Boston, MA, March 8, 2021 – Brown Brothers Harriman & Co. (BBH), a market leading ETF custodian and administrator, today released the findings of their 8th annual global ETF investor survey. The survey found that ETF allocation continues to rise across the globe, with 72% of global ETF investors planning to increase their ETF allocation in the next year. Innovative emerging investment strategies such as thematic—including robotics and digital assets—combined with their resilience in the wake of pandemic-induced volatility helped fuel demand for ETFs in 2020. 80% of global ETF investors said they plan on increasing exposure to thematic ETFs this year. 2020 marked the dawn of semi-transparent active ETFs in the United States and demand for active ETFs may be strong in 2021 globally. More than half of respondents said they “definitely” plan to increase their exposure to these products.

BBH measured the expectations and preferences of nearly 400 institutional investors, financial advisers, and fund managers from the United States, Europe, and Greater China to identify key trends, highlight changing sentiment, and explore areas of innovation in the dynamic ETF marketplace. 2020 was marked by volatility and sell-offs, but also sizable flows into ETFs—especially fixed income ETFs, which saw strong flows following market volatility in Q1 of last year. The survey found that 66% plan to increase fixed income ETF allocations this year and 42% said they buy fixed income ETFs during periods of heightened volatility where the ETF offered transparency and liquidity when compared to the individual bonds.

“2020 was a year of volatility, but it was also a banner year for ETFs,” said Shawn McNinch, Global Head of ETF Services at BBH. “The resiliency of the ETF structure and supporting capital market infrastructure saw them not only weather the storm but cement their status as a go-to option for investors to trade, especially in times of market stress.”

Key findings include:

  • ETF allocations continue to rise: Last year’s market volatility did not seem to scare our respondents away from ETFs, as 72% of global ETF investors plan to increase their ETF allocation in the next 12 months, an increase of three percentage points from our 2020 survey.
  • There’s an appetite for active ETFs: 65% of respondents plan to increase their exposure to active ETFs, up from 57% in 2020. More than half of U.S. ETF investors plan on buying a semi-transparent, active ETF in the next six months.
  • Thematic ETFs are going mainstream: 80% of investors will increase their allocation to thematic ETFs this year.
  • Respondents are saying the right things about ESG: In five years, 56% of ETF investors expect to have at least 11% invested in ESG ETFs, but lack of industry standards and varying track records may inhibit adoption.

Read the full report here: bbh.com/etfsurvey

 

About Brown Brothers Harriman

BBH is a privately held financial institution that has been a thought leader and solutions provider for over 200 years. The firm serves individuals, families, businesses and institutions in its three business lines: Private Banking, Investment Management, and Investor Services. BBH’s culture of accountability fosters deep and lasting relationships built on commitment, adaptability and trust. The company is independent, selective, and specialized by design.

BBH’s Investor Services business provides cross-border custody, accounting, administration, execution and technology services to many of the world’s leading asset managers and financial institutions. With deep ETF product expertise, BBH works with both experienced ETF managers and new, innovative market entrants to introduce and grow their ETF products. BBH helps asset managers launch, list, and cross-list ETFs across the globe.

BBH operates its global business out of seventeen offices located in New York, Beijing, Boston, Charlotte, Chicago, Dublin, Grand Cayman, Hong Kong, Jersey City, Kraków, London, Luxembourg, Nashville, Philadelphia, Tokyo, Wilmington and Zürich. For more information, please visit www.bbh.com.

BBH is a registered service mark of Brown Brothers Harriman & Co. in the United States and other countries.

Panoramic view of  colorful sunrise in mountains.
Up Next
Up Next

2021 Global ETF Investor Survey

March 08, 2021
In our eighth annual ETF Survey, we outline the emerging trends in usage, selection, and demand for exchange-traded funds.

Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2021. All rights reserved. IS-07081-2021-02-25

This browser is not fully supported by our public website and may not display or function as expected for this reason. Please note, the Infuse Portal and BBH client applications fully support the IE 11 browser.

Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

 
1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see bbhluxembourgfunds.com


captcha image

Type in the word seen on the picture

I am a current investor in another jurisdiction