E*TRADE Study Reveals the Varying ETF Preferences of Older and Younger Investors
August 26 2016 - 8:05AM
Business Wire
Millennial investors are more interested in
non-traditional ETFs, while Boomers gravitate to dividend and
industry-specific ETFs
E*TRADE Financial Corporation (NASDAQ:ETFC) today announced
results from the most recent wave of StreetWise, E*TRADE’s
quarterly tracking study of experienced investors. Results show how
exchange-traded fund (ETF) preferences vary by age:
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- Millennials are more likely than
Boomers to show interest in a range of less mainstream ETFs,
including commodity, style, and foreign currency ETFs.
- Boomers prefer dividend ETFs over any
other type.
- The top three ETFs for the total
surveyed investor population are U.S. market index ETFs, dividend
ETFs, and sector- and industry-specific ETFs.
“The strong interest in U.S. market index ETFs suggests
investors have faith in the domestic markets post-Brexit,” said
Rich Messina, SVP of Investment Product Management at E*TRADE
Financial. “While U.S. market index ETFs are by far the most
popular choice, investors are exploring additional asset classes in
search of yield, downside protection, and income generating
positions.”
Mr. Messina offered the following observations on what is
driving investors towards certain ETF types:
- Dividend ETFs are popular for
income: In a market characterized by uncertainty, geopolitical
headwinds, and low fixed income yields, investors of all ages are
turning to dividend ETFs as a possible source of income
streams.
- Non-traditional ETFs gain traction
as investors search for yield: In today’s unprecedented low
interest rate environment, investors hunting for yield are stalking
an increasingly elusive prey, as traditional fixed income yields
continue to be under pressure. Investors with larger risk
appetites, like some Millennials, are looking to take advantage of
lower prices in places like commodity and bond ETFs.
- ETFs focused on non-cyclical sectors
can be used to mitigate risk: Sector-specific ETFs such as
utilities, consumer staples, and REITs are seen as non-cyclical
sectors that can help protect against market volatility, which can
be particularly attractive to older investors nearing
retirement.
Visit E*TRADE’s Newsroom for the full Q3’16 StreetWise study
results.
E*TRADE helps investors balance today’s needs with tomorrow’s
goals, through pioneering digital tools coupled with guidance
online and from Financial Consultants. To learn more about
E*TRADE’s trading and investing platforms and tools, visit
etrade.com.
For useful insight from E*TRADE and third-party investment
professionals, follow the Company on Twitter, @ETRADE.
About the Survey
This wave of the survey was conducted from July 2 to July 11 of
2016 among an online U.S. sample of 949 self-directed active
investors who manage at least $10,000 in an online brokerage
account. The survey has a margin of error of ±3.18 percent at the
95 percent confidence level. It was fielded and administered by
ResearchNow. The panel is broken into thirds of active (trade more
than once a week), swing (trade less than once a week but more than
once a month) and passive (trade less than once a month). The panel
is 65 percent male and 35 percent female with an even distribution
across online brokerages, geographic regions, and age bands.
Referenced Data
In what types of ETFs of are you most
interested?
TOTAL
AGE: 25-34
AGE: 35-54
AGE: 55+
U.S. market index ETFs 50% 48% 53% 49% Dividend ETFs 45% 39% 43%
51% Sector- and industry-specific ETFs 32% 23% 30% 41% Commodity
ETFs 19% 26% 19% 16% Bond ETFs 18% 26% 16% 15% Foreign market index
ETFs 15% 16% 18% 13% Style or market cap ETFs 12% 20% 13% 6%
Actively managed or smart beta ETFs 12% 13% 13% 10% Leveraged ETFs
10% 12% 10% 9% Foreign currency ETFs 9% 15% 10% 4% Inverse ETFs 8%
10% 7% 6% ETNs (Exchange-traded notes) 5% 7% 6% 3% Derivative ETFs
5% 9% 6% 1% Other (i.e. Vol ETFs, ETFs of ETFs, equal weight ETFs)
3% 2% 3% 3% None of these 9% 4% 7% 14% I don't know
10% 8% 12%
10%
“Millennials” defined as age 25 – 34 //
“Gen X” defined as age 35 – 54 // “Baby Boomers” defined as age
55+
About E*TRADE Financial and Important Notices
E*TRADE Financial and its subsidiaries provide financial
services, including online brokerage and banking products and
services to retail customers. Specific business segments include
Trading and Investing and Balance Sheet Management. Securities
products and services, including stocks, bonds, mutual funds,
options, and ETFs are offered by E*TRADE Securities LLC (Member
FINRA/SIPC). Managed Account Solutions are offered through E*TRADE
Capital Management, LLC, an investment adviser registered with the
Securities and Exchange Commission. Bank products and services are
offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or
its subsidiaries and affiliates. More information is available at
www.etrade.com.
The information provided herein is for general informational
purposes only and should not be considered investment advice. Past
performance does not guarantee future results. ETFC-G
E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks
or registered trademarks of E*TRADE Financial Corporation.
© 2016 E*TRADE Financial Corporation. All rights reserved.
E*TRADE Financial Corporation and ResearchNow are separate
companies that are not affiliated. E*TRADE Financial Corporation
engages ResearchNow to program, field, and tabulate the study.
About ResearchNow
ResearchNow, a leading digital data collection provider, powers
market research insights. They enable companies to listen to and
interact with the world’s consumers and business professionals
through online panels, as well as mobile, digital, and social media
technologies. Their team operates in over 20 offices globally and
is recognized as the market research industry’s leader in client
satisfaction. They foster a socially-responsible culture by
empowering their employees to give back. To find out more or begin
a conversation, visit www.researchnow.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160826005049/en/
E*TRADE Media
RelationsThayer Fox,
646-521-4418thayer.fox@etrade.comorE*TRADE
Investor RelationsBrett Goodman,
646-521-4406brett.goodman@etrade.com
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