A recent survey commissioned by BMO Investments Inc. reveals that only 18% of Canadian investors are aware of ETFs (Exchange Traded Funds), which are investment funds that provide investors with exposure to actively or passively tracked indices, and or participation in packaged investment strategies.
The study further revealed that once investors were made aware of the benefits of these securities, 74% of participants said they would consider ETFs in their investment decision making.
"Although ETFs have been around for only 20 years, they're gaining in popularity and we believe they are poised to take off in Canada," said Serge Pépin, Head of Investments, BMO Investments Inc. "Investors value the various benefits that ETFs have to offer, including lower costs, transparency, tax efficiencies, investment flexibility and diversity."
The study, by Leger Marketing, also revealed the key barriers preventing Canadians from holding ETFs in their portfolios. These include:
- Not knowing how to get started / lack of knowledge (34 per cent)
- Uncertainty on how to integrate ETFs into current investments (23 per cent)
- Not having the time or expertise to pick and choose individual ETFs (21 per cent)
"Being a relatively new investment option, it's only natural that many investors remain unsure how to effectively integrate ETFs into their investment portfolios," continued Mr. Pépin. "Many are attracted to ETFs, but a lack of knowledge may make them hesitate when adding them to their investments."
Finally, the survey also revealed that some two-thirds would invest in ETFs if they were structured (or packaged).
Source: BMO Investments Inc.
