The opening five months of 2019 have seen professional investors carry out more research into areas such as technology and ethical exchange-traded funds (ETFs) while paying less attention to strategies tracking US and UK equities, FE Trustnet analysis suggests. 
While 2018 was a challenging year for investors, with losses or flat returns being posted by most markets following a host of headwinds, 2019 has been relatively easier for investors to navigate. FE Analytics shows that the MSCI AC World index has made an 11.26 per cent total return over the year to date, despite the recent upset of renewed trade tensions between the US and China.
Against this backdrop, we found out which equity ETFs the financial advisers, wealth managers and other professional investors who use FE Analytics have been researching over 2019 so far then looked how this has changed when compared with the previous three years.
While the ETF Equity – USA sector remains the most researched equity ETF peer group, it is currently getting a lower research share than it did over the previous three years (falling from 9.72 per cent of all EFT research on FE Analytics to 7.85 per cent this year).
Performance of sector vs global equities over 2019-to-date
Source: FE Analytics Market Intel Tool
ETF Equity – Tech Media & Telecom is the equity ETF sector that has seen the largest uptick in research activity over the opening months of 2019. Its FE Analytics research share went from 1.74 per cent to 2.36 per cent, which is an increase of 0.61 percentage points.
As the chart above shows, technology ETFs have had a relatively strong start to the year with the average member of the sector outperforming the MSCI AC World index by a decent margin. This comes after a difficult end to 2018 for tech stocks, when they were at the heart of the fourth-quarter sell-off.
The FE Analytics Market Intel Tool shows that the most heavily researched member of the ETF Equity – Tech Media & Telecom peer group is L&G ROBO Global Robotics and Automation. As its name suggests, this $1.3bn ETF tracks a basket of stocks of companies that are actively engaged in robotics and automation related activities, covering companies involved in activities such as artificial intelligence, 3D printing, industrial automation and security products.
ROBO Global, which build the index that the ETF tracks, said: “Robotics, automation and artificial intelligence technologies are already disrupting nearly every industry in every geography, creating a swift transition to an ‘automate or fail’ economy that is dictating the success or failure of corporations large and small.
“Still in its infancy, this multi-decade transition to a world in which automation and technology are applied to all industries, markets and geographies is positioned to provide a unique opportunity for today’s forward-thinking investor.”
Other ETF Equity – Tech Media & Telecom members that are receiving the most research on FE Analytics include iShares Automation & Robotics, iShares Digitalisation, L&G ISE Cyber Security GO, First Trust Indxx Innovative Transaction & Process and iShares S&P 500 Information Technology Sector.
Performance of sector vs global equities over 2019-to-date
Source: FE Analytics Market Intel Tool
The equity peer group with the second biggest increase in its research share compared with the past three years is a more mainstream sector: ETF Equity – International. This is one of the more popular ETF sectors with investors, thanks to its members’ ability to offer geographical diversification at a low cost.
An increase in research into global portfolios is a theme that has also been seen in the open-ended fund and investment trust spaces, as investors seek to allocate outside of the UK and the risks associated with Brexit and political uncertainty.
The most heavily researched ETF in the peer group this year has been iShares Core MSCI World. The fund is intended to be used at the core of a portfolio to seek long-term growth and, in tracking the MSCI World index, offers broad exposure to a wide range of global companies within 23 developed countries.
Most of the most popular ETF Equity – International members on FE Analytics offer broad exposure to global equities (Vanguard FTSE All World, iShares MSCI World, HSBC MSCI World) although some more specialist mandates are also close to the top of the list (iShares Edge MSCI World Minimum Volatility, Vanguard FTSE All World High Dividend Yield, iShares Ageing Population).
The ETF Equity – Australia has also captured more attention on FE Analytics this year. The most researched ETFs here include VanEck Australian Equal Weight, Vanguard Australian Shares Index and Vanguard MSCI Australian Small Companies Index.
The ETF Equity – Ethical sector has also been more popular, in keeping with a general trend within the investment industry of greater use of environmental, social and governance factors.
The iShares Dow Jones Global Sustainability Screened ETF is the most researched member of the peer group; it invests in global equities that do not generate revenues from alcohol, tobacco, gambling, armament, firearms and adult entertainment.
Other offerings such as UBS ETF MSCI World Socially Responsible, iShares MSCI World Islamic and Lyxor Global Gender Equality have been popular within this niche sector in 2019.
Performance of sector vs global equities over 2019-to-date
Source: FE Analytics Market Intel Tool
In contrast, equity ETF sectors such as ETF Equity – USA and ETF Equity – UK continue to be among the most researched on FE Analytics in an absolute sense but their relative popularity has slipped when compared with the past three years.
ETFs tracking the S&P 500 are overwhelmingly the most researched options in the ETF Equity – USA sector, although more specialist offerings such as SSGA SPDR S&P US Dividend Aristocrats, UBS ETF - MSCI USA Socially Responsible and iShares Edge S&P 500 Minimum Volatility are towards the top of the list.
When it comes to ETF Equity – UK, a more mixed bag of trackers are the most viewed including iShares Core FTSE 100, iShares UK Dividend, Vanguard FTSE 250 and iShares MSCI UK Small Cap.