Tag: continuation

**Retail Investors’ Appetite for ETFs Continues to Grow, Says Charles Schwab Report**

Retail investors are showing increasing enthusiasm for exchange-traded funds (ETFs), both among experienced investors and those considering their first ETF investments. This trend is highlighted in the 14th annual “ETFs and Beyond” report from Charles Schwab Asset Management.

**Momentum Building Toward ETF-Only Portfolios**

“It’s a continuation of the momentum we have been seeing,” noted David Botset, Head of Strategy, Innovation and Stewardship at Schwab Asset Management. “Investors continue to indicate they anticipate more of their investment portfolios going into ETFs in the future, such that they are actually thinking about a future where, in some cases, within five years, they may have an ETF-only portfolio.”

**Survey Overview**

The study surveyed 2,000 retail investors, evenly split between those who currently hold ETFs in their portfolios and those who have yet to invest in them. Notably, most respondents with ETF holdings began investing in these products within the past five years (66%), while 32% started before 2019.

The survey results were unveiled at the Schwab Impact conference held this week in Denver.

**Key Findings Among ETF Holders**

– An overwhelming 93% of investors with ETFs consider them a necessary part of their portfolio.
– 82% identified ETFs as their preferred investment vehicle.
– 61% reported increasing their ETF allocations in 2025.
– 75% indicated they were likely to invest in another ETF within the next two years.
– Currently, ETFs represent about 27% of these investors’ portfolios, with expectations to rise to 34% within five years.
– 62% said they would reallocate money from individual stock investments into ETFs.
– 51% planned to pull funds from mutual funds to increase ETF holdings.
– 38% would invest new, previously uninvested money into ETFs.

**Newer Investors Show Greater Enthusiasm**

Investors who adopted ETFs in the past five years are more inclined to significantly increase their ETF allocations compared to those who began investing earlier.

– About half of both newer and experienced investors plan to increase their ETF investments modestly within the next year.
– However, 30% of newer investors aim to significantly boost their ETF holdings, versus only 12% of seasoned investors.
– When it comes to maintaining current investment levels, 15% of newer and 29% of experienced investors preferred to keep their allocations steady.
– Notably, 70% of newer investors are open to the idea of an ETF-only portfolio, compared to 49% of experienced investors.

**Generational Differences in ETF Adoption**

Generation also plays a significant role in ETF investment intentions:

– 32% of millennials plan to significantly increase their ETF holdings in the next year, compared to 20% of Gen X investors and 6% of baby boomers.
– A majority of millennials (66%) would consider allocating their entire portfolio to ETFs.
– Only 42% of Gen X investors and 15% of baby boomers shared this consideration.

**Interest Among Non-ETF Investors**

Among respondents not currently holding ETFs, 48% expressed likelihood to invest in ETFs within the next two years.

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### Preferred Strategies and Asset Classes

For most ETF investors (53%), portfolios rely mainly on core strategies complemented by some tactical or niche holdings. Another 18% allocate their entire ETF portfolio to core strategies.

**Top Asset Classes for ETF Investment:**

– **U.S. Equities:** 52% plan to invest
– **Bonds/Fixed Income:** 45%
– **Cryptocurrency:** 45%
– **Emerging Markets Equities:** 41%
– **Real Assets:** 40%
– **International Developed Markets:** 29%
– **Alternatives:** 26%

David Botset commented, “The majority of ETF investors are either using ETFs to establish a core investment portfolio, or they are doing a core investment portfolio with a small portion that is a little bit more tactical… ETF investors are seemingly using ETFs more and more in lieu of mutual funds.”

Dividend ETFs are especially popular, with 54% of surveyed investors planning to invest in them. Single-stock ETFs follow at 36%.

**Active vs. Passive Management Preferences**

– Passive ETFs are preferred for U.S. equities, bonds/fixed income, international developed markets, and cryptocurrency.
– For emerging market equities, 39% of investors prefer actively managed ETFs, slightly more than the 35% who favor passive funds.
– Alternatives also see a tilt toward active management, with 35% opting for it compared to 32% choosing passive ETFs.

Top reasons for choosing actively managed ETFs include:

– Potential to outperform index ETFs (63%)
– Access to alternative strategies (51%)
– Potential downside protection (45%)
– Access to specific funds or asset managers (41%)

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### Factors Influencing ETF Selection

Cost remains the most critical factor when choosing an ETF, cited by 59% of respondents—a notable increase of 200 basis points from 2024’s survey.

Other influential factors include:

– **Reputation of the ETF Provider:** 55%
– **ETF Brand Name:** 40%
– **Investment Stewardship Approach:** 39%

Both investors with and without current ETF holdings demonstrated strong interest in optimizing tax strategies through ETFs, at 60% and 49% respectively.

Additionally, 55% of current ETF investors and 39% of non-investors expressed interest in investing in long-term trends and macro themes via ETFs.

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### About the Survey

Conducted between July 25 and August 14, 2025, the annual study targeted investors aged 25 to 75 with at least $25,000 in investable assets. Non-ETF investors were required to have at least some familiarity with ETFs.

The survey was carried out by independent research firm Logica Research.

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*As interest and adoption of ETFs continue to rise, Schwab Asset Management’s latest report underscores the growing role ETFs play in retail investors’ portfolios across generations and experience levels.*
https://www.wealthmanagement.com/etfs/schwab-majority-of-retail-investors-plan-to-up-their-etf-allocations