Study Says European Investors Not Taking Advantage of ETF Features

The EDHEC Risk and Asset Management Research Center's new study: the EDHEC European ETF Survey 2008, sponsored by iShares, shows that while Exchange-Traded Funds (ETFs) are now widely used and practitioners are highly satisfied with their features, the use of ETFs is largely limited to passive holdings of broad market indices, and the wide range of ETFs for subcategories and styles is not being used to its full potential.

The EDHEC European ETF Survey 2008 also shows that most practitioners do not benefit from the possibilities of trading options on ETFs, selling ETFs short, or lending them out. The authors of the survey believe that there is considerable value-added in making use of an important feature of ETFs—that they can be bought and sold like stocks. They are also ideally suited for dynamic risk management in portfolio construction. The EDHEC study shows that such dynamic risk budgeting has substantial benefits.

The EDHEC European ETF Survey 2008 is an in-depth study on the use of ETFs by European investors. The survey is based on a questionnaire that was addressed to industry participants in Europe from January 29 to April 21, 2008. The study generated responses from 111 institutions based in Europe