The 2018 FTSE Russell smart beta advisor survey expanded on the global index provider’s 2015 US advisor smart beta survey with input from 256 full-time, fee-based financial advisors and wealth managers divided almost equally between the US, UK and Canada. In addition to asking advisors about their awareness and use of smart beta index-based investment strategies, the FTSE Russell survey asked about ETF preference and usage:
- Among the 81 Canadian financial advisors surveyed, 37% believe their ETF use will increase in the next 12 months. ETFs actually led the list followed by individual stocks (32%), active mutual funds (25%) and separately managed accounts (22%).
- When selecting ETFs, Canadian financial advisors cite cost (44%), performance (38%) and diversification (37%) as the most important factors to consider.
- When asked where they would like to see more ETF choices, Canadian financial advisors surveyed asked for international or global equity (31%), smart beta/factor-oriented (30%) and emerging markets, commodities and international fixed income (28%) above all other choices.
- 52% of Canadian advisors see ETFs as the preferred vehicle for actively managed fixed income strategies, relative to 27% of US and 22% of UK financial advisors.
- Canadian financial advisors use both ETFs and mutual funds for passively managed fixed income strategies, while UK advisors tend to favor mutual funds and US advisors favor ETFs.
Source: FTSE Russell - Smart beta: 2018 survey findings from US, Canadian and UK financial advisors.
Jacqueline O’Flanagan, Director, FTSE Russell Canada:
“Findings from our recent survey of Canadian financial advisors confirm a robust and growing market for index-based ETFs in Canada. The survey results also reinforce room for expansion in this market as Canadian advisors are looking for a more diverse selection of ETFs to help meet their clients’ needs for portfolio diversification.”
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