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Asia ETF Survey (August 2012)

Asian investors like ETFs for their low costs and show a preference for physical replication.

We recently conducted our first Morningstar ETF Centre ETF survey in the Asia (ex-Japan) region. The survey was designed to gauge investors' interest in and understanding of ETFs as well as their general preferences within and perceptions of the local ETF market. One of the key findings is that ETFs’ low cost was their most important attribute in investors’ decision making process, ranking 80% out of a scale of 100%. This held true amongst both current and prospective individual investors.


Our survey also touched on the hot topic of physical versus synthetic replication. The results revealed that the majority (63%) of respondents prefer physical replication ETFs. Interestingly, the individual investors who participated in our survey appeared to be more receptive to using synthetic replication ETFs than the professional investors who took part. Of those surveyed, 22% of current individual ETF investors stated a preference for synthetic replication versus just 8% of current professional ETF investors.

Other key findings of the survey are as follows:

·         Of the individual investors surveyed, half of the respondents have already invested in ETFs. Meanwhile, those who haven't previously invested in ETFs expressed a desire to learn more about them before investing.

·         Amongst individual investors who participated (both current and prospective), most of them manage their own portfolio (76%) while only 12% have an adviser.

·         The majority of ETF investors (professional or individual) have owned them in an amount that is less than 20% of the value of their overall portfolio.

·         ETF investors appear to be buy-and-hold investors, with 76% indicating that they expect to trade their ETF holdings only occasionally.

·         Equity ETFs, especially country-specific ETFs, are more popular than fixed-income ETFs (in particular, amongst professional investors). Strategy-based ETFs seem quite popular amongst individual investors, with 56% of individual respondents indicating that they would likely hold ETFs tracking strategy indices in their portfolios.


The Morningstar survey compiled results from 106 respondents, of which 84 were individual investors and 22 were professional investors.


For the detailed ETF survey report, click here.

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Morningstar Analysts