ETF investor numbers have climbed to over 1.7 million as the products expand their appeal across age and gender

From

Dr Irene Guiamatsia

Key points

  • Investors are increasingly using ETFs as portfolio core
  • Compared to five years ago, new retail ETF investors are younger and more likely to be female
  • ETF users have embraced thematic investing, with renewable energy the most popular

Leading research firm Investment Trends has recently launched its 2021 ETF Investor and Adviser Report, an in-depth study about the demand for and the usage of ETFs, including desired product attributes, motivations for investment and views/ perceptions of ETF products and ETF product providers.

The latest Investment Trends Report highlights ETF investor numbers have soared 33% to more than 1.7m in the past year. This growth is showing no signs of abating with another 275,000 intending to start using ETFs in the next 12 months. The number of investors using ETFs in core portfolio allocation (more than 25% of portfolio in the product), also looks set on a strong growth trajectory – 27% of ETF investors did so in 2021, up from 16% in 2020 and 4% in 2019.

“ETF adoption reached new highs in 2021 among both investors and advisers,” said Irene Guiamatsia, Head of Research Investment Trends. “Whether judicious or otherwise, retail investors tacitly associate passive investing with a cautious approach. The (ongoing) market turbulence certainly appears to have propelled a product that already had strong wind in its sails”

Underpinning the strong growth is the emergence of younger female investors. Recent entrants to the market are on average younger and more likely to be female – 21% of new ETF investors are females aged between 18 and 34 years old. Young people are drawn to the low cost of investing and ability to access these products with relative ease.

“Young women are on a mission to close the gender investing gap and determined to take charge of their financial future,” said Guiamatsia “They are eager to grow their knowledge and skills, highlighting education opportunities for issuers, financial advisers and investing platforms.”

For the first time in the 13 years of this study, we measured appetite for thematic ETFs and found investors to be vastly more receptive to the thematic lens (e.g. renewable energy, AI) than the traditional asset-class based approach (e.g. global equities).

“2021 was a significant inflection point that saw the concepts of ‘doing good’ and ‘doing well’ finally coalesce in investors’ minds, with ETFs seen as the vehicle of choice providing ease of access, “said Guiamatsia.

About the report

The Investment Trends 2021 ETF Investor and Adviser Report provides deep insights into demand for and usage of ETFs, including desired product attributes, motivations for investment and views/ perceptions of ETF products and ETF product providers

The 13th edition of the Report is based on quantitative online surveys of both investors and financial advisers conducted between 11 September and 28 October 2021. ​

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