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Komfie Manalo, Opalesque Asia:

A study by data provider Greenwich Associates showed that institutional investors in the U.S. are stepping up their use of exchange traded funds (ETFs) as they prepare their investment portfolios for the return of volatility and the shift to a rising interest rate environments.

The Greenwich Associates 2018 U.S. ETF Study surveyed 180 institutions and found that an increased use of ETFs in 20 of the 21 equity and fixed-income product categories covered in the research.

Andrew McCollum, Greenwich Associates managing director and author of the report, commented, "As they ready their portfolios for the end of the 'Goldilocks' market, U.S. institutions are integrating ETFs more deeply into their portfolio management and investment strategies."

Driving this expansion is ETF versatility. ETFs are being adopted in portfolios alongside, and in some cases in place of, individual stocks and bonds, mutual funds and derivatives as a source of primary beta exposures for use in a wide variety of active and passive investment strategies.

Institutions are making greater use of ETFs in strategic portfolio functions. They are using ETFs to obtain investment exposures in "core" portfolio allocations, and as building blocks in top-down strategies that create alpha through asset allocation, as opposed to security selection. T......................

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