UK investor confidence in Exchange Traded Funds remains high as the New Year approaches, after an iShares Insights Conference investor survey reveals 71% of investors expect to increase their usage of ETFs for asset allocation purposes.

The survey shows one in four ETF investors (25%) are more optimistic about the market outlook with only one in 10 (11%) less optimistic. Mirroring broader investor sentiment for emerging markets, around one third of ETF investors anticipate using ETFs to satisfy appetite for exposure to emerging market equities and debt.

Liquidity ranked most highly when selecting an ETF in front of other factors including the type of index and total expense ratio (TER).

The survey also indicated:

• More than one in three ETF investors (32%) are likely to increase their exposure to emerging market equities in 2011 whilst almost one in four (22%) anticipate allocating more to emerging debt
  
• One in five (19%) anticipate increasing their asset allocation to developed equity markets
  
• Within commodities, gold remains a popular asset for ETF investors, with 12% expecting to allocate to this asset class in 2011
  

David Gardner, Head of Sales for EMEA at iShares, said: “iShares asset flows mirror investor sentiment towards increasing allocations to ETFs, which remain an important means of accessing key markets and sectors. When choosing an ETF, liquidity is vital to investors, allowing greater trading flexibility and cost efficiency. iShares will continue to construct liquid products that meet investor demand and enable clients to tap into emerging investment themes and strategies.”