Invesco Study: ETF Usage Increasing Among RIAs
Risk Management Remains Top of Mind as Advisers Pursue Strategic Mix of Products
HOUSTON, Oct. 17, 2012 /PRNewswire/ -- Registered Investment Advisers (RIAs) expect to see increased usage of Exchange-Traded Funds (ETFs) in client portfolios, while aversion to risk remains high, according to results of an Invesco market research study released today.
RIAs surveyed 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.
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.
"This year's study continues to show how RIAs are embracing the value of ETFs and the many ways they can be implemented in their clients' portfolios," said Bobby Brooks, National Sales Director for Invesco PowerShares. "But even as the equity markets have enjoyed a strong run year-to-date, RIAs are still indicating that risk management is a primary focus and they are looking to a variety of products, including alternative assets, to manage risk."
With such issues as portfolio allocation and risk management in mind, Invesco partnered with Cogent Research to conduct its second blinded study to learn what's top of mind for RIAs and their clients given current market conditions.
Among other key findings in the Invesco study:
- RIAs continue to blend active and passive funds in a single portfolio
Forty percent of RIAs agree that now more than ever they are creating client portfolios using a blend of active investment vehicles and passive ETFs. Less than a quarter of RIAs utilize an exclusively all active management portfolio (24 percent) or an all ETF/passive management portfolio (19 percent).
- Risk management remains a priority
Consistent with the 2011 survey, RIAs cite managing risk as a predominant philosophy in managing client assets (40 percent). The survey showed wealth preservation as the most important issue for clients, followed by mitigating risk.
- Risk management investment strategies have not changed
RIAs continue to mitigate risk in client portfolios by creating a blended asset allocation of active investments and passively managed ETFs (62 percent) and applying a more conservative asset allocation (56 percent).
- Alternatives, emerging market equities and large-cap funds drawing more attention
Within actively managed mutual funds, RIAs are most likely to increase capital over the next 12 months in alternatives (46 percent), emerging market equities (43 percent) and U.S. large-cap funds (40 percent).
About the Invesco RIA Market Research Study
The RIA Market Research Study was conducted for Invesco by Cogent Research in late August and early September 2012. The study is based on a survey of RIAs around the country with an average of $478 million in investable client assets. Cogent Research is not affiliated with nor employed by Invesco.
Later this month, a white paper featuring additional, detailed findings from the study will be available on invesco.com and via your Invesco sales representative.
To address concerns RIAs have regarding risk management, the Invesco RIA Division launched nationwide "Risk Institute" seminars earlier this year. These meetings provide RIAs risk education, risk-aware implementation ideas and programs to help them effectively speak with clients about risk topics. Please contact your Invesco sales representative for more information about opportunities in your region.
About Invesco PowerShares
Invesco PowerShares Capital Management LLC is Leading the Intelligent ETF Revolution® through its family of more than 140 domestic and international exchange-traded funds, which seek to outperform traditional benchmark indexes while providing advisors and investors access to an innovative array of focused investment opportunities. With franchise assets over $65 billion as of June 30, 2012, PowerShares ETFs trade on both U.S. stock exchanges. For more information, please visit us at invescopowershares.com or follow us on Twitter @PowerShares.
Invesco Ltd. is a leading independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our retail, institutional and high net worth clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at www.invesco.com.
Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.'s retail mutual funds, exchange-traded funds and institutional money market funds and the subdistributor for its STIC Global Funds. It is a wholly owned, indirect subsidiary of Invesco Ltd.
About Cogent Research
Cogent Research helps clients gain clarity, obtain perspective, and formulate direction on critical business issues. Founded in 1996, Cogent Research provides custom research, syndicated research products, and evidence-based consulting to leading organizations in the financial services, life sciences, and consumer goods industries. Through quality research, advanced analytics, and deep industry knowledge, Cogent Research delivers data-driven solutions and strategies that enable clients to better understand customers, define products, and shape market opportunities in order to increase revenues and grow the value of their products and brands.
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