This Year's ETF Keywords: "Active, ESG, Cryptocurrency"

Brown Brothers Harriman Survey
2021 ETF Keywords

[Asia Economy Reporter Junho Hwang] "This year's ETF keywords are Active, ESG, and Cryptocurrency."

Brown Brothers Harriman, a U.S. private bank and global ETF service provider, recently announced the main keywords for this year's Exchange-Traded Fund (ETF) market based on their survey. The bank conducts this survey annually under the name "Global ETF Investor Survey."

Tesla Impact... "We will increase the proportion of Active ETFs"

The most notable point in this survey is the interest in Active ETFs. 65% of global investors and 71% of U.S. investors stated that they will necessarily include Active ETFs this year. In the U.S., 20% of the total number of ETFs are Active ETFs. This is analyzed as an effect of the success of ARK Investment's innovative ETF lineup, which achieved significant profits by heavily including Tesla, a U.S. electric vehicle company. In particular, 51% of respondents said they would expand investments in semi-transparent Active ETFs, whose Portfolio Deposit File (PDF) is not disclosed daily.

The popularity of thematic ETFs is also expected to continue. 80% of respondents said they would increase their investments in thematic ETFs this year. Interest was especially strong in themes related to technological innovation (IT, Robotics/AI) and sustainability themes. On the other hand, interest in some themes such as cannabis was relatively low.

By region, the U.S. has seen the preference for thematic ETFs rise to a level similar to sector ETFs. Meanwhile, in Europe and China, preference for sector ETFs still surpasses that for thematic ETFs.

"ESG is the trend"..."Curious about Cryptocurrency"

Image source=Getty Images

Investment in ESG ETFs is also expected to grow. 82% of respondents said they plan to expand ESG investments over the next year, with 92% of Greater China investors among them planning to increase ESG investments.

Additionally, fueled by rapid price increases and institutional improvements, interest in cryptocurrency ETFs is expected to grow. Looking at the list of ETF themes by investment region, cryptocurrency ranks third in the U.S. and second in Europe and China. In February, the Toronto Stock Exchange listed the world's first cryptocurrency ETF (BTCC) tracking the price of Bitcoin. Although cryptocurrency ETF approvals are still rejected in most regions due to regulations, discussions on cryptocurrency ETFs are expected to continue alongside increasing institutional investor demand for cryptocurrency portfolio inclusion and the rise of DeFi (Decentralized Finance).

This content was produced with the assistance of AI translation services.