## [# Advisors Planning to Boost Equity ETF Investments, Survey Finds ](/sections/features/advisors-planning-boost-equity-etf-investments-survey-finds)
# Advisors Planning to Boost Equity ETF Investments, Survey Finds
JPMorgan, State Street say interest in ETFs growing globally.
[](/contributors/michelle-lodge)
[By Michelle Lodge](/contributors/michelle-lodge)
May 24, 2023
Edited by: Ron Day
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Investor interest in exchange-traded funds appears to be rebounding after net inflows fell last year, according to the [Global ETF Survey 2023](https://www.etfcentral.com/global-etf-survey/2023) by J.P. Morgan Asset Management and State Street.
A majority of respondents, 56%, planned to increase their exposure to equity strategies this year, and 40% said the same about fixed-income-related strategies, which are becoming increasingly popular.
The survey polled over 500 global financial professionals, including asset managers, independent financial advisors and single-family offices. About half were based in Europe, the Middle East and Africa, 42% in the Americas and 7% in Asia Pacific.
Many of them see ETFs as an effective replacement for direct investing and mutual funds, and are drawn to the low fees, easy diversification and accessibility.
In the Americas, nearly half of investors also mentioned tax efficiency as a key driver, and 80% said they would be more interested in an active strategy when it is packaged as a ETF rather than a mutual fund, demonstrating preference for ETFs over mutual funds remains strong in that region.
## **Attractive Returns**
“Professional investors are turning to the power of ETFs to execute increasingly sophisticated, innovative, and incisive strategies that can generate attractive returns as business conditions become more challenging,” the report’s authors wrote.
Interest in fixed income ETFs rose considerably from last year, despite the difficulty of comparing and analyzing products. The authors see this as an indication investors are seeking sustainable approaches and more consistent cash flows. Another sign of that sustainability trend is the increase in inflows to the bond market in recent years.
“A greater number of offerings means that investors can now choose the fixed income products that align with their specific goals,” the authors noted.
ESG and sustainable ETFs appear to be gaining traction, too, with 38% of respondents saying they had between 1% to 20% invested in those funds.
On the other hand, 76% of respondents said they allocated nothing to cryptocurrency ETFs, showing a marked shift away from those products. However, interest in crypto remains, with only 23% of respondents saying they would not consider investing in the currencies at all.
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## **Scant Cash Drag**
No one needs to sell James Bayard on ETFs. A CFP and co-founder of Capital South Wealth Management in Baton Rouge, Louisiana, told etf.com in an email that his firm uses ETFs “almost exclusively” for their tax efficiency and for the ability to get “nearly 100% of the position deployed in securities, so there is little to no cash drag (as opposed to a mutual fund, which may hold 3% to 5% cash on hand).”
Matthew Garasic, CFP, founder and president of Unrivaled Wealth Management in Pittsburgh, also sees ETFs as remaining popular.
“The drop in net inflows from 2021 to 2022 is more a reflection of market performance than ETF interest,” he said in an email. “With two primary asset classes, equities and bonds, declining in tandem, there were likely more investors pulling out of the market than you would see in a typical year.”
ETF adoption rates are higher in the U.S. than in Europe because they were introduced in the U.S. seven years earlier. American ETFs also have a simpler market structure, the report notes.
Cost and liquidity are the top criteria investors cited when it comes to selecting ETFs. In the Americas, 75% of respondents said risk/return profiles were an extremely or very important consideration as well.
Overall, the report concludes that high interest rates and the increase in the weighted average cost of capital has made ETFs more appealing to investors around the world.
“Professional investors rely on ETFs to help them target the themes, sectors, industries, and companies that can prevail in this new climate,” the authors wrote.
*Follow Michelle Lodge on Twitter @lodgemich*
[ Michelle Lodge ](/contributors/michelle-lodge)
Michelle Lodge is a journalist who is a contributor to many sites: Fortune, Money, Time, Barron’s, Investopedia, CNBC.com and Bloomberg.com. [View Bio](/contributors/michelle-lodge)
Related Topics [Fixed Income](http://www.etf.com/topics/fixed-income)
[ESG](http://www.etf.com/topics/esg)
[Crypto](http://www.etf.com/topics/cryptocurrency)
[Advisor Center](http://www.etf.com/topics/advisor-center-0)