A new survey by ARK Invest Europe has upturned the pervasive argument of Active versus Passive ETFs, revealing that most European professional investors (80%) are indifferent, looking only for the best ETF product.
ARK Invest Europe surveyed around 180 professional investors in Europe on their attitudes towards the European ETF market. It found that 80% of respondents were equally interested in both active and index ETFs as an investment opportunity. Only one-in-ten were solely interested in active ETF investing, the same goes for indexed strategies.
From this survey, 83% were most keen to invest in AI and Robotics-themed ETFs. This was followed by Cybersecurity (61% ) and Innovation (57%). Sustainable Infrastructure (41%) and Sustainable Food (40%) also made up the top five themes for European investors.
Rahul Bhushan, Managing Director at ARK Invest Europe, said: “This survey, despite its small sample size, challenges the often-simplistic narrative of active versus index investing. It’s not a binary choice. Instead, professional investors emphasise the importance of well-constructed ETF products and the quality and clarity of the investment process, irrespective of whether it is active or index.
“At ARK Invest, we offer both active and index solutions in an ETF format, and the choice of whether we go with active or an index depends on the nature of the theme.
“Indeed, when investing along the broad value chain of a general-purpose technology, such as AI or blockchain, an active approach might be sensible, as standardised definitions are lacking, and no two investors with a research-powered process are likely to end up with the same basket of AI companies. We see evidence of this across thematic ETFs focused on AI, in particular, where some are Nasdaq 100 proxies, whereas others do things completely differently, to the extent that they might have a 0.6 correlation to the Nasdaq 100 or to other AI ETFs.
“In contrast, for clear-cut sectors or industry groups, such as cybersecurity or food, an index approach makes the most sense—not because of a lack of conviction in specific stocks (we exclude many companies from our index ETFs based on factors like financial strength and volatility), but because these sectors are easier to map and can be delivered at a lower price point as an index.”
ARK Invest Europe offers the following active ETFs:
v ARK Artificial Intelligence & Robotics UCITS ETF
v ARK Genomics Revolution UCITS ETF
Its indexed ETF solutions are the Rize range:
v Rize Cybersecurity and Data Privacy UCITS ETF
v Rize Digital Payments Economy UCITS ETF
v Rize Environmental Impact 100 UCITS ETF
v Rize Global Sustainable Infrastructure UCITS ETF
