The ever popular exchange-traded fund is set to become a larger part of investors’ portfolios, forecast to nigh-on double in six years.

Strangely, this forecast comes from a relative newcomer to the all-popular passive instrument, JP Morgan Asset Management, in a report, the firm found that in 2016, ETFs made up just 22 percent of client portfolios on a global basis. Two to three years from now, this figure is set to increase to 39 percent. At present, ETFs account for 29 percent of investment portfolios globally.

ETFs are most used in the US whereby they make up 41 percent of client portfolios, expected to rise to 54 percent in two to three years.  Latin America currently stands head and shoulders above EMEA and Asia Pacific in terms of ETF usage; 35 percent, 25 percent and 23 percent respectively, rising to 43 percent, 34 percent and 33 percent in the next two to three years.

Bryon Lake, Head of International ETFs at J.P. Morgan Asset Management said in a statement: “Investors are becoming increasingly knowledgeable about ETFs and choosing to embrace the ETF vehicle which offers a number of unique benefits like daily liquidity, intraday trading, transparency and real time price monitoring. We believe we’re at the tipping point of the mass market adoption of ETFs,”

“ETFs are typically viewed as an extension of investment toolkits to help meet evolving asset allocation needs. And this is what we’re seeing play out in our survey findings in terms of rising ETF allocations. What’s more, we’re finding many investors are increasingly banging the drum for actively-managed ETFs. They’re looking for actively managed strategies that can be delivered through the benefit rich ETF wrapper. This is the kind of innovation investors are now demanding,” said Lake.

He added: “We’re committed to being part of a long-term conversation with our clients in order to help them build even more robust portfolios.”

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