Lower costs and trading flexibility are prompting more high net worth investors to use ETFs, according to a report.
“A Spectrem’s Millionaire Corner study on ETFs shows that while not as popular as mutual funds for investing, ETFs are growing rapidly among the investment community,” reports Kent McDill , a staff writer forMillionaire Corner. “Fewer costs and freer transaction opportunities make ETFs a new choice especially for high net worth investors.”
More highlights from the study:
The Millionaire Corner research studied three different wealth segments: Mass Affluent ($100,000 to $1 million not including primary residence), Millionaire ($1 million to $5 million NIPR) and Ultra High Net Worth $5 million to $25 million NIPR). Only 28% of all investors studied owned ETFs, but that number ranges depending on wealth and understanding of the products.
ETFs are particularly popular with Ultra High Net Worth investors, with 47% of those studied owning ETFs. A similar number (45%) of survey respondents who classify themselves as knowledgeable about investments owned ETFs.[Millionaires’ Use of ETFs Rises 200% in Six Months]
The other end of the study was the Mass Affluent, of which only 15% own ETFs. Only 13% of those who are not very knowledgeable about investment products own ETFs.
Some investors own both ETFs and Mutual Funds, and most of them like to that way – 47% of investors said they preferred having both products in their portfolio. While 30% preferred mutual funds and 24%said they preferred ETFs. Almost two-thirds of invests said they would be likely to move funds from mutual funds into ETFs.
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