Schwab’s ETF Investor research examines exchange-traded fund (ETF) usage and perceptions among retail investors.
ETF Investor Study by Charles Schwab
The ETF Investor Study by Charles Schwab is an online survey designed to gauge individual investors’ attitudes toward and understanding of ETFs, and how or if they would use them as part of their investment portfolios. More than 1,000 individual investors who either own or are considering purchasing an ETF participated in our August 2012 survey. Eighty-one percent of respondents say "ETFs are here to stay," but the need for education persists: 45 percent still call themselves novices when it comes to understanding these products.
Eighty-one percent of individual investors surveyed in the new 2012 ETF Investor Study say ETFs are here to stay.
Investor Perceptions of ETFs
Q27: What is your opinion about the place ETFs have amongst other investment options? (Base: All respondents = 1010)
Cost is the most important factor in selecting ETFs.
Importance of various factors when selecting ETFs
Q18 How important is each of the following to you in selecting a potential ETF? (Base: All investors = 1010)
Overall understanding of ETFs remains elementary.
Self-description of ETF understanding
Q11: When it comes to your understanding of ETFs, do you consider yourself a/an…?
(Base: All investors = 1010, ETF Owners = 634, ETF Considerers = 376)
The expense ratio is the most important cost.
Importance of factors when evaluating the cost of owning ETFs
Q19 How important is each of the following to you when evaluating the cost of owning ETFs: Trade commission, Expense ratio, Bid/ask spread, Premium and discount pricing? (Base: All respondents = 1010)
Investor knowledge of ETFs is improving.
Change in knowledge of ETFs over the past year
Q12 How has your knowledge of ETFs changed over the past year? (Base: All respondents = 1010, ETF Owners = 646, ETF Considerers = 364)
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 1-800-435-4000 or by visiting www.schwabetfs.com. Please read the prospectus carefully before investing.
Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF.
Since a sector fund is typically not diversified and focuses its investments on companies involved in a specific sector, the fund may involve a greater degree of risk than an investment in other mutual funds with greater diversification.
Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO is not affiliated with The Charles Schwab Corporation or any of its affiliates.
About the 2012 ETF Investor Study by Charles Schwab
The 2012 ETF Investor Study by Charles Schwab is an online survey of more than 1,000 U.S. individual investors between the ages of 25-75 with at least $25,000 in investable assets and some familiarity with ETFs. The study was designed to assess attitudes toward and understanding of ETFs. Sixty-three percent of survey respondents own ETFs, holding on average 16 percent of their total portfolios in ETFs. The remaining respondents do not own ETFs, but are considering purchasing one in the next two years.
Conducted by Koski Research in August 2012, the study has approximately a three percent margin of error. Survey respondents were not asked to indicate whether they had accounts with Charles Schwab. All data is self-reported by study participants and is not verified or validated.