UK ETF Investors: 5%-19% of Portfolio in ETFs

According to the Morningstar Asia ETF Survey 2012, “Amongst those professional and individual investors who have previously held ETFs in their investment portfolios, the majority have owned them in an amount that is less than 20% of the value of their overall portfolio.” Here, we bring you the latest situation in the UK from our Morningstar UK ETF 2013. Do you find any similarities between yourselves and the UK ETF investors?

The results from our fifth Morningstar UK ETF Centre survey show an increase in the importance investors are placing on one of the hallmark attributes of ETFs—their low costs.

Of those respondents that currently invest in ETFs, the majority own them in an amount that is less than 20% of the value of their overall portfolio. Current users also appear to be a buy-and-hold bunch, with 63% reporting that they plan to trade their ETF holdings only occasionally.

"In a world of low expected returns in all asset classes, it comes as no surprise to see greater focus on costs, and costs associated with ETF investing are no exception," said Hortense Bioy, director of European passive fund research at Morningstar.

"The Retail Distribution Review[i] and entrance of ultra-competitive providers like Vanguard in the ETF marketplace, have clearly contributed to further raising the UK investors’ awareness of the low cost nature of ETFs," Bioy added.

Our survey captured a broad range of investors that are either interested in or already investing via ETFs. Half of all respondents have already invested via ETFs, with the remainder still familiarising themselves with these new vehicles.

Out of 630 total responses, 543 came from individual investors whilst 87 came from professional investors, mostly advisers.

Click here (English only) to read the full results and analysis of our ETF survey.

Holly Cook is the Managing Editor of Morningstar.co.uk

[i] The Retail Distribution Review (RDR) in the UK is a set of rules put in place at the beginning of 2013 with the ultimate goal to ensure there is more transparency and clarity in the investment advice industry. For further details, readers can refer to our special report on the RDR on Morningstar.co.uk.