Investors are using exchange-traded funds (ETFs) as tactical tools and strategic, longer-term allocations, so banks are investing heavily to capture this business. Research recently published by Greenwich Associates revealed that allocations to ETFs in Europe increased by 50% in 2018 and now total 15% of total assets among 127 institutional ETF investors surveyed by the research firm. These included 46 institutional funds, 48 asset managers, 14 insurance companies and 19 discretionary wealth managers. Andrew McCollum, managing director at Greenwich Associates, attributes some of this growth to the market volatility at the end of last year. “As institutions repositioned their portfolios to address heightened volatility and risk, they made wide use of ETFs to implement specific modifications. Institutions are utilizing ETFs as both tactical tools and as a strategic, longer-term staple in the portfolio.”

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