TORONTO, June 3, 2015 /CNW/ - Institutional money managers
have a vast array of sophisticated investment options at their
disposal. Increasingly, they are turning to exchange-traded funds
(ETFs), citing liquidity, transparency and ease of
implementation.
In particular, institutional investors have expressed a growing
interest in smart beta ETFs, according to research conducted by
Market Strategies International.
Sponsored by Invesco PowerShares, an affiliate of PowerShares
Canada, the research report, titled The Evolution of Smart Beta
ETFs, confirms that the use of smart beta ETFs among
institutional decision makers is poised for continued growth.
Smart beta indices employ alternative security selection and
weighting criteria with the goal of outperforming a
market-capitalization-weighted benchmark and/or reducing risk.
Smart beta ETFs captured over 17% of total U.S. ETF equity
inflows in 2014, despite representing only 11% of institutional ETF
assets. Thirty-six percent of institutional investors used smart
beta ETFs in their portfolios, up from 24% in 2013, while the mean
allocation rose to 13% from 7%.
Performance was the primary motivator for smart beta ETF usage
for 22% of respondents, followed by reducing volatility (19%) and
seeking exposure to specific assets (15%).
Asset flows could increase dramatically in the coming three
years, as 62% of respondents said they expected to increase their
use of smart beta ETFs, up from 53% in 2013.
Low-volatility, fundamental-weighted and high-dividend ETFs are
poised to see the greatest growth over the next three years, as
more than two-thirds of respondents indicated they are likely to
use one of these strategies.
"Invesco PowerShares has a long track record of bringing smart
beta strategies to market in the U.S., and Invesco Canada extends
that track record with a diverse ETF lineup in Canada," says Jason
MacKay, Head of Global Investment Strategies at Invesco
Canada. "We are committed to partnering advisors with
next-generation index creators to deliver investment strategies
that go beyond market-capitalization weighting to better manage
risk and enhance returns for investors."
Financial professionals can access the full research results and
analysis by visiting:
https://www.invesco.com/portal/site/us/financial-professional/etfs/subscribe/market-strategies-intl-report.
The survey was conducted between October
9, 2014 and December 2, 2014.
A 15-minute online survey was administered to 253 institutional
decision makers, including pensions, endowments/foundations,
non-profit institutions and mutual fund providers as well as
registered investment advisors ("RIAs") who manage institutional
business. All institutional participants had at least US$20 million in assets and allocated at least 1%
of their assets to ETFs. Institutional RIAs had at least
US$25 million in assets under
management – a portion of which was managed on behalf of
institutional investors.
For more information, please visit www.invesco.ca. You can also
connect with Invesco Canada on Twitter (@InvescoCanada), LinkedIn
or Facebook.
Commissions, management fees and expenses may all be associated
with investments in ETFs. ETFs are not guaranteed, their values
change frequently and past performance may not be repeated. Please
read the prospectus before investing. Copies are available from
Invesco Canada Ltd. at www.powershares.ca.
About Invesco Canada Ltd.
Invesco Canada Ltd.,
operating under three distinct yet complementary product brands
(Trimark, Invesco and PowerShares), is one of Canada's leading investment management
companies. A subsidiary of Invesco Ltd., Invesco Canada's singular
focus is on investment management, offering a diversified suite of
solutions to institutions, organizations, companies and individual
investors across Canada and around
the world. Additional information is available at
www.invesco.ca.
About Invesco Ltd.
Invesco Ltd. is a leading
independent global investment management firm, dedicated to helping
investors worldwide achieve their financial objectives. By
delivering the combined power of our distinctive investment
management capabilities, Invesco provides a wide range of
investment strategies and vehicles to our clients around the world.
Operating in more than 20 countries, the firm is listed on the New
York Stock Exchange under the symbol IVZ. Additional information is
available at www.invesco.com.
Invesco® and all associated trademarks are trademarks
of Invesco Holding Company Limited, used under licence.
PowerShares®, Leading the Intelligent ETF
Revolution® and all associated trademarks are trademarks
of Invesco PowerShares Capital Management LLC (Invesco
PowerShares), used under licence. PowerShares Canada is a
registered business name of Invesco Canada Ltd.
© Invesco Canada Ltd., 2015
SOURCE Invesco Canada Ltd.