OREANDA-NEWS. 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.

 

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.

 

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.