The director of business development at Société Générale-owned ETF provider Lyxor said the need to consider the whole investment universe as part of a diversified portfolio, as well as an increase in outsourcing by advisers, meant the level of consideration for ETF investing is growing.
Adding that Lyxor intends to increase marketing and educational activity in the UK this year, he said: “The factor we see that stops people using ETFs is a lack of knowledge.
“There has been a preference within the advisory space for actively managed funds.
“However, we feel there is a growing pragmatism, with fund management groups being challenged to justify their active management costs while passive providers are addressing a lack of knowledge.”
Mr Thompson’s claims came as Blackrock’s monthly exchange-traded product landscape study was published, revealing that global ETP inflows for February amounted to $27.2bn (£16.3bn), almost three times the figure of $9.8bn (£5.9bn) in February 2013.
According to the BlackRock study, fixed income flows set a new record for February of $19.6bn (£11.7bn), amid expectations that low interest rates and low inflation are set to continue.
Adviser view
Jason Witcombe, director of London-based Evolve Financial Planning, said: “I’m not convinced that using ETFs qualifies as outsourcing, but overall I agree that keeping costs to a minimum is very important in creating a sensible financial plan for clients, who would prefer us to spend more time with them rather than trying to pick one active manager over another.”
