Funds and ETFs to benefit as investors switch from shares says GraniteShares
New research from ETP provider GraniteShares shows regular UK investors are set to cut back on direct investment in shares in the year ahead in favour of putting more money into funds and ETPs.
Its study among investors who have bought individual shares in the past year shows more than one in four (26 per cent) plan to invest more in funds and ETPs over the next 12 months.
Funds will be slightly more popular with 8 per cent of those questioned planning to switch to them exclusively compared with 5 per cent who will focus more on ETPs. However more than one in eight (13 per cent) will invest more in funds and ETPs.
More than two-fifths (42 per cent) have no plans to reduce their total investments in shares over the next year while 32 per cent have yet to decide on plans for the year ahead.
The research for GraniteShares, which offers UK sophisticated investors a suite of index ETPs tracking FAANG stocks and a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK markets, found investors still have faith in US technology stocks despite their recent weakness.
Just a fifth (21 per cent) of investors say they have sold all their US tech investments or cut them because of recent high profile issues such as Netflix shares crashing and confusion over the takeover of Twitter hitting the share price of Tesla. Around 11 per cent say they have increased their US tech investments as a result.
Will Rhind, Founder and CEO at GraniteShares says: “Recent volatility has highlighted the risks of investing in single stocks, and it is interesting that so many investors are planning to focus more on funds and ETPs over the year ahead.
“That doesn’t entirely seem to be the case with US tech stocks which are still highly regarded by investors despite recent weakness and the growing view that there is further to fall.
“That is reflected in the demand for products such as short and long ETPs which provide the flexibility needed to help navigate volatile market swings on both the long and short sides. Our research found growing awareness of shorting with 62 per cent of investors saying they are aware they can do that by using ETFs or ETPs.”