Since 2008, the combined value of ETFs held in client's accounts has increased by more than 330 per cent, a study from Barclays Stockbrokers shows.
The research also says that the average client deal size has increased by 88 per cent over the period, and the volume of assets invested on a monthly basis has increased by 60 per cent. In addition, the number of client accounts holding ETFs has more than doubled, with each of these accounts holding two or more different ETF products.
"The study is starting from a very low basis, which is why the increase looks so substantial. That said, ETFs are increasingly popular – we certainly favour them," AFH Wealth Management's head of investment research Graham Toone said.
"Investors do need to look under the lid of some to make sure they know what they're getting into, for example gold ETFs, but the plain vanilla FTSE 100 funds are straightforward," he added.
AFH Wealth Management uses global sector ETFs like global healthcare and utilities in its own OEICs, allowing UK retail investors access to an area they can't get direct exposure to.
The Barclays Stockbrokers' study shows investors have increasingly diversified their portfolios through ETFs to access a greater range of asset classes.
"There has been more focus on emerging markets with investments such as the iShares MSCI Emerging Markets attracting investor interest. Clients have also continued to use ETFs to access other major market indices, such as the iShares S&P 500 and income based products such as the iShares FTSE UK Dividend Plus," Paul Inkster, head of product at Barclays Stockbrokers said.
The study shows that FTSE 100 ETF products continued to be among the top sellers in September, with the ETFS FTSE 100 Super Short Strategy (2x) and the iShares FTSE 100 topping the list. Developing markets products, those which track the MSCI Brazil and the MSCI Emerging Markets indices, were also popular.
Best selling ETFs over 2-yrs
Source: Financial Express Analytics
Financial Express data shows the best selling products returning up to 170 per cent to investors in the past two years.
"Some ETFs are high risk, while others are a safe way to get access to an index," Allenbridge's Jonathan Wallis said.
"Investors must make sure they are aware of the counterparty risk involved in buying them," he added.