"ETFs have proven themselves through multiple market cycles and the study findings show investors are confident in their investments even when the outlook is uncertain," he said.
Even with such uncertainties as market volatility, recession worries, high inflation and interest rates, global conflicts, the AI growth outlook and the U.S. presidential election, ETF investors didn't grow skittish, according to Schwab. A majority said those factors either didn't change how they invested in ETFs or prompted them to put more money into them.
Among the study's other findings:
- ETF investors like the classic 60/40 portfolio, with an average of 60% of their portfolios in stocks and 40% in fixed income, with differences across generations. Millennials, for example, on average have 54% of their portfolios in equities and 46% in fixed income.
- Forty-four percent of millennials plan to increase fixed income investments in the coming year compared with 34% of Gen Xers and 26% of baby boomers.
- While less than a third of ETF investors hold actively managed ETFs, over 85% say they are highly or somewhat likely to pursue actively managed ETFs in the next two years.
- Equities are the top asset class the ETF investors plan to invest in next year via ETFs, at 55%, followed by cryptocurrencies, at 45%, fixed income at 44%, real assets at 40%, international equities at 27% and alternatives at 19%.
- Millennial ETF investors are open to investing in a broader range of asset classes through ETFs, including crypto, real assets and alternatives. Sixty-two percent plan to invest in cryptocurrency through ETFs in the next year, more than Gen X or boomers.
- Over 91% of ETF investors see ETFs as a necessary part of their portfolios and 65% plan to increase investments in ETFs in the next year.
- ETF investors predict that 37% of their portfolios will be in ETFs in five years, up from 27% today.
- Forty-five percent of non-ETF investors say they're likely to consider purchasing an ETF in the next two years.
"ETFs have become a well-established part of investor portfolios, yet they continue to see a broadening audience as younger investors turn to these products to begin building their financial futures and as established investors benefit from the diversification, low cost, and flexibility of ETFs," Botset said.
