Canadian institutions that use ETFs allocate an average 18.8% of total assets to exchange-traded funds (ETFs)— the highest average allocation found in any institutional market in the world.
Although U.S. pension funds are looking to address a serious funding crisis through allocations to alternative investments such as private equity and illiquid credit, many funds are still overlooking another tool that improves risk-adjusted investment returns and helps restore funding levels: exchange-listed options.
Investment in ETFs surged last year in Asian institutional fixed-income portfolios, where allocations to ETFs grew to 17.1% of total fixed-income assets, from just 6.6% in 2016.
The continued pressure on plan sponsors to close funding gaps while managing risk is forcing U.S. institutional investors to take a hard look at their portfolio allocations.
U.S. institutional investors preparing their investment portfolios for the return of volatility and the shift to a rising interest-rate environment are stepping up their use of exchange-traded funds.
Institutional investors are leaving money on the table by using familiar investment vehicles like bonds without first looking to see if they could obtain the same exposure more efficiently with another product like an ETF or a future.
Throughout 2017 banks around the world invested heavily in their FX businesses. These banks were working to keep up with Citi and J.P. Morgan, which, among top-tier accounts, have established themselves firmly atop the list of 2018 Greenwich Share Leaders in Global FX.
In banking, the analytics arms race is on. Commercial and business banks are late to the analytics party, as advanced analytics have been adopted at a much faster rate in a range of other industries — including consumer banking.
Institutional investors increased their annual spending on risk and analytics platforms to $700 million, as “risk tech” expenditures nearly doubled to 10% of total buy-side trading desk technology budgets in 2017.
As institutional investors combat an increasingly complex and expanding list of strategic issues, a growing number are turning to outsourced CIO (OCIO) providers to access investment expertise and secure better investment outcomes.