RIAs Increasing Use of ETFs


Registered Investment Advisers (RIAs) expect to increase their use of ETFs, according to a study released by Invesco (NYSE:IVZ). Invesco is the parent company of PowerShares, the fourth-largest U.S. ETF issuer.

RIAs polled by Invesco believe ETFs will make up 24 percent of portfolio allocations over the next 12 months and 33 percent over the next three years, representing a 10 percent increase over results reported in Invesco's survey of RIAs in 2011, according to a statement issued by the firm.

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Despite a rally in U.S. equities this year, the Invesco study notes RIAs see clients as risk-averse and that risk management is a primary focus. Against a lingering backdrop of global economic uncertainty, RIAs still see clients remaining vigilant in their aversion to risk as 91 percent believe their clients are more interested in minimizing losses than maximizing gains, according to the study.

Invesco surveyed RIAs throughout the U.S. with an average of $478 million in assets under management. While the survey indicated RIAs are increasingly blending active and passive investment strategies, less than a quarter (24 percent) use portfolios comprised of entirely active strategies. Just 19 percent use an all ETF/passive management portfolio.

In last year's survey RIAs indicated ETFs would represent 22 percent of client portfolios, on average, over the next year and 30 percent of client portfolios by 2014.

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