Retail share traders are increasingly turning to ETFs and funds at the expense of trading individual stocks, new research from ETP provider GraniteShares shows.
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Will Rhind, Founder and CEO at GraniteShares
- Nearly one in three plan to invest more in ETFs and funds at the expense of shares
- Up to 27% of retail share traders currently trade leveraged or short ETPs
Its research found nearly a third (30%) of regular share traders plan to cut investment in individual stocks in the year ahead to concentrate on investments in ETFs and funds. Around 16% will invest more in ETFs and funds while 7% will increase investment only in ETFs and 7% in funds exclusively
The research for GraniteShares, which offers UK sophisticated investors a suite of index ETPs tracking FAANG stocks and a suite of Short and Leveraged Single Stock Daily ETPs tracking some of the most popular companies in UK markets, shows ETF investment is growing in popularity.
Around a quarter (27%) of regular share traders in the UK currently invest in leveraged or short ETPs. Leveraged long ETPs are more popular with around 9% of regular traders using leveraged long strategies while 4% invest in short ETPs. Around one in eight (13%) say they use both types of products.
Awareness of the ability to short individual stocks using ETPs is high – more than half (54%) of regular share traders say they know about using ETPs to profit from falling share prices. The study found 11% of traders currently own ETFs or ETPs with men (15%) twice as likely as women (8%) to hold them.
Will Rhind, Founder and CEO at GraniteShares said: “There are signs of a growing switch away from investing in individual stocks among regular share traders as they look to other ways of investing such as ETFs and funds.
“It is potentially a sign of the growing maturity of the UK retail trading market with investors who first started trading during the pandemic now looking for other ways to invest their money.
“That is reflected in the demand for products such as short and long ETPs which provide the flexibility needed to help navigate volatile market swings on both the long and short sides.”
Source: ETFWorld.co.uk
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