MSCI survey shows diverging ETF and managed fund trends

An MSCI ETF Intelligence Survey reveals diverging trends in how investment professionals approach active ETFs and managed funds across different regions. In the US and Europe, the growth of active ETFs appears to be driving a substitution effect. Approximately 58% of surveyed advisers in these regions indicated that new active ETF allocations from an existing manager would likely replace an existing mutual fund or UCITS holding.

In contrast, the Australian market shows a trend of coexistence. While 73% of Australian respondents intend to increase their exposure to active ETFs over the next two years, 55% also plan to increase their exposure to managed funds. This differs significantly from the US and Europe, where 41% of respondents expected to decrease their exposure to managed funds.

Across the surveyed regions, there is a general expectation of increased ETF usage. In the US and Europe, 71% of respondents expect to increase active ETF use, while in Australia, that figure is 73%. The primary drivers for switching to ETFs include lower fees, transparency of holdings, and client preference.