Sector investing with etfs - UK manager survey

In December we conducted a Survey of senior portfolio managers and decision makers from firms whose combined assets under management is in excess of £500bn.  The survey was designed to get a better understanding on how those managers approach sector investing.
 
Our key findings based on the survey are summarised below:

• Sectors may be used more frequently to reflect tactical positioning rather than long-run strategic views.  We interpret this to be consistent with portfolio managers looking to use different sector exposures at different stages of the economic cycle.
• When investing with sectors, using world equity sector exposures is considered more often than US or European sectors.  We interpret this to reflect the global nature of portfolio managed in London.  We would not necessarily expect the same result for portfolios managed in the US or continental Europe.
• Portfolio managers may use sector ETFs to implement their views rather than individual stocks.  We interpret this to reflect the desire to access a particular sector at different stages of the economic cycle, while avoiding idiosyncratic risks of security selection.
• Portfolio managers may use ETFs as much as actively managed funds for implementing sector views.  We were surprised than this higher-than-expected level of adoption.
• Diversification and efficiency were cited as the key benefits, whilst liquidity was cited a key concern.

For more information and important notices, view the full report.

VIEW REPORT