As many as 34% of UK investors that shun the exchange-traded wrapper revealed they did so because they did not understand them, while 19% responded they did not know they existed
Just 22% of UK retail investors use the exchange-traded wrapper, according to a survey commissioned by US ETF shop, WisdomTree, and carried out by Opinium, while exchange-traded product (ETP) assets across Europe have continued to grow at pace, climbing to $1.6trn in 2021.
According to the report, UK investors opt for stocks and shares investments (47%) which are, according to WisdomTree, ‘often higher risk’ than investment funds, while 33% invest in open-ended funds and 32% allocate to investment trusts.
As many as 34% of UK investors that shun the wrapper revealed they did so because they did not understand them, while 19% responded they did not know they existed.
Despite the large growth in demand for ETFs and ETPs by professional investors, uptake has been slower in the retail market, and particularly in the UK when compared with other European countries like Germany, said Adria Beso, head of platforms distribution, sales, Europe, at WisdomTree.
Confidence in knowing how and why to invest in ETFs and ETPs is low, leading to a lack of investment despite the fact they are easily traded, offer diversification and more transparency, and are low cost, all of which are important in the current economic backdrop, he added.
ETPs have propped up US markets over the last few months, as the impact of Russia’s invasion of Ukraine spread across Europe.
WisdomTree has been increasingly targeting European investors through its product line-up, focusing particularly on the digital assets space.
The New York-headquartered firm revealed at the start of the year it was planning to add 30 more ETPs to its 310-strong line up during 2022.
This recent report demonstrated that while ETPs were out of favour in the UK, popularity was growing among young investors, as 36% of 18-34 year olds were found to invest in them, compared to 5% of those aged 55 and over.