European interest in ESG ETFs falls 6% over the last 12 months, while the Chinese and US rise 13% and 11% respectively.
These figures come from the latest Brown Brothers Harriman 2021 Global ETF Survey.
The survey also reveals 72% of responders plan to increase their ETF allocation, though Europeans remain on an ebb.
80% of global investors will increase allocation to thematic ETFs in 2021, only 69% in Europe are planning on doing the same.
2020 marked the dawn of semi-transparent active ETFs in the United States and demand for active ETFs may be strong in 2021 globally. More than half of respondents said they “definitely” plan to increase their exposure to these products.
BBH measured the expectations and preferences of nearly 400 institutional investors, financial advisers, and fund managers from the United States, Europe, and Greater China to identify key trends, highlight changing sentiment, and explore areas of innovation in the dynamic ETF marketplace.
2020 was marked by volatility and sell-offs, but also sizable flows into ETFs—especially fixed income ETFs, which saw strong flows following market volatility in Q1 of last year.
The survey found that 66% plan to increase fixed income ETF allocations this year and 42% said they buy fixed income ETFs during periods of heightened volatility where the ETF offered transparency and liquidity when compared to the individual bonds.
Shawn McNinch, Global Head of ETF Services at BBH, said, “2020 was a year of volatility, but it was also a banner year for ETFs.”
McNinch continued, “The resiliency of the ETF structure and supporting capital market infrastructure saw them not only weather the storm but cement their status as a go-to option for investors to trade, especially in times of market stress.”