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Investors are failing to make the most of ETFs' advanced features in spite of the soaring popularity of the vehicle, according to the EDHEC Risk and Asset Management Research Centre.

EDHEC surveyed more than 360 high-net-worth and institutional investors and found that the use of ETFs for all asset classes continued apace.

ETF use across all asset classes has gained popularity over the past three years, with use in the equity universe increasing from 45 per cent to 95 per cent, while ETFs in government bond investments have seen the biggest increase, with the number of respondents who reported using them up from 40 per cent to 80 per cent.

In spite of the growing interest in ETFs, very few investors are using the advanced features available to them, such as securities lending, trading options and short selling, EDHEC said. Its survey found fewer than 15 per cent of users were taking advantage of these features.

EDHEC said the failure to use advanced ETF products and strategies could not be put down to unawareness of such techniques, as fewer than 10 per cent of users said they were unaware of them.

And while such features are currently not widely used, the survey found that these features were twice as likely to be used now as they were 12 months ago.

EDHEC's survey also found ETFs and futures were respondents' preferred indexing instruments.

EDHEC said futures were perhaps the most serious rival to ETFs, which respondents ranked highest for the range of indices and asset classes they made available. It said ETFs were preferred for their lower minimum subscription, fewer operational constraints and friendlier tax and regulatory regimes.

In terms of the future of the asset class, emerging market equity ETFs appeared to have the most potential for growth, with 47 per cent of respondents saying they would like to see more development in this area.

About a third said they would also like to see products developed in alternative asset classes, particularly commodities (35 per cent), currencies (30 per cent), and hedge funds (28 per cent).

Adrian Shandley, managing director at Premier Wealth Management, said: "I'm a very big fan of ETFs, but think we could be using them more. Where they are at their best is when used simply to buy into vanilla markets and indices."

He said he therefore tended to be a bit more "wary" of the more complex structures.