Most Investors Do Not Know What ETFs Are

Mintel Comperemedia, a marketing research firm, predicts that exchange-traded fund (ETF) assets will experience double digit growth over the next five years. 

As a result of its research into ETFs, Mintel believes that providers of ETFs have huge potential for growth, due to the fact that the majority of retail investors (60%) are still unfamiliar with the product. Even investors who do have ETFs as a part of their portfolios are not entirely sure how the product works; 54% said they feel “very knowledgeable” about investing with ETFs.    

Despite the growing popularity of ETFs in the last few years, providers still have obstacles to overcome; Mintel found that only 17% of existing investors in mutual funds and individual stocks reported feeling comfortable with ETFs.

Susan Menke, vice president and behavioral economist at Mintel Comperemedia, said in a press release that one reason ETFs have not saturated the market as deeply as mutual funds is that they are not commonly offered in qualified plans such as 401(k)s, and even those who have ETFs in non-retirement accounts are still unfamiliar with this type of investment.