ETF investors expect to increase their usage

Over 70% of investors expect to increase their usage of ETFs for asset allocation purposes, according to an iShares survey.

The iShares Insights Conference investor survey questioned over one hundred institutional clients in the UK, with one in four ETF investors now more optimistic about the market and only one in ten less optimistic.

When asked about the determining factors in selecting an ETF, investors ranked liquidity as the most important, ahead of the type of index and total expense ratio (TER).

iShares head of sales for EMEA David Gardner says liquidity is vital in allowing greater trading flexibility and cost efficiency.

Reflecting broader market sentiment, roughly one third of ETF investors anticipate using ETFs to gain exposure to emerging market equities and debt.

A third of those polled are likely to invest in emerging market equities, while nearly a quarter expect to allocate more to emerging market debt.

By comparison, only one in five said they would be increasing their provision in developed equity markets.

Gold retains its grip on investor sentiment, with 12% expecting to allocate to this asset class in 2011.

Gardner says iShares' experience echoes the findings of the survey. He adds: "iShares asset flows mirror investor sentiment towards increasing allocations to ETFs, which remain an important means of accessing key markets and sectors."