E*TRADE Study Reveals the Varying ETF Preferences of Older and Younger Investors

Millennial investors are more interested in non-traditional ETFs,
while Boomers gravitate to dividend and industry-specific ETFs

NEW YORK–(BUSINESS WIRE)–E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from
the most recent wave of StreetWise, E*TRADE’s quarterly tracking
study of experienced investors. Results show how exchange-traded fund
(ETF) preferences vary by age:


  • Millennials are more likely than Boomers to show interest in a range
    of less mainstream ETFs, including commodity, style, and foreign
    currency ETFs.
  • Boomers prefer dividend ETFs over any other type.
  • The top three ETFs for the total surveyed investor population are U.S.
    market index ETFs, dividend ETFs, and sector- and industry-specific
    ETFs.

“The strong interest in U.S. market index ETFs suggests investors have
faith in the domestic markets post-Brexit,” said Rich Messina, SVP of
Investment Product Management at E*TRADE Financial. “While U.S. market
index ETFs are by far the most popular choice, investors are exploring
additional asset classes in search of yield, downside protection, and
income generating positions.”

Mr. Messina offered the following observations on what is driving
investors towards certain ETF types:

  • Dividend ETFs are popular for income: In a market characterized
    by uncertainty, geopolitical headwinds, and low fixed income yields,
    investors of all ages are turning to dividend ETFs as a possible
    source of income streams.
  • Non-traditional ETFs gain traction as investors search for yield:
    In today’s unprecedented low interest rate environment, investors
    hunting for yield are stalking an increasingly elusive prey, as
    traditional fixed income yields continue to be under pressure.
    Investors with larger risk appetites, like some Millennials, are
    looking to take advantage of lower prices in places like commodity and
    bond ETFs.
  • ETFs focused on non-cyclical sectors can be used to mitigate risk: Sector-specific
    ETFs such as utilities, consumer staples, and REITs are seen as
    non-cyclical sectors that can help protect against market volatility,
    which can be particularly attractive to older investors nearing
    retirement.

Visit E*TRADE’s Newsroom
for the full Q3’16 StreetWise study results.

E*TRADE helps investors balance today’s needs with tomorrow’s goals,
through pioneering digital tools coupled with guidance online and from
Financial Consultants. To learn more about E*TRADE’s trading and
investing platforms and tools, visit etrade.com.

For useful insight from E*TRADE and third-party investment
professionals, follow the Company on Twitter, @ETRADE.

About the Survey

This wave of the survey was conducted from July 2 to July 11 of 2016
among an online U.S. sample of 949 self-directed active investors who
manage at least $10,000 in an online brokerage account. The survey has a
margin of error of ±3.18 percent at the 95 percent confidence level. It
was fielded and administered by ResearchNow. The panel is broken into
thirds of active (trade more than once a week), swing (trade less than
once a week but more than once a month) and passive (trade less than
once a month). The panel is 65 percent male and 35 percent female with
an even distribution across online brokerages, geographic regions, and
age bands.

Referenced Data

In what types of ETFs of are you most interested?

       

 

TOTAL      

AGE: 25-34

   

AGE: 35-54

   

AGE: 55+

U.S. market index ETFs 50% 48% 53% 49%
Dividend ETFs 45% 39% 43% 51%
Sector- and industry-specific ETFs 32% 23% 30% 41%
Commodity ETFs 19% 26% 19% 16%
Bond ETFs 18% 26% 16% 15%
Foreign market index ETFs 15% 16% 18% 13%
Style or market cap ETFs 12% 20% 13% 6%
Actively managed or smart beta ETFs 12% 13% 13% 10%
Leveraged ETFs 10% 12% 10% 9%
Foreign currency ETFs 9% 15% 10% 4%
Inverse ETFs 8% 10% 7% 6%
ETNs (Exchange-traded notes) 5% 7% 6% 3%
Derivative ETFs 5% 9% 6% 1%
Other (i.e. Vol ETFs, ETFs of ETFs, equal weight ETFs) 3% 2% 3% 3%
None of these 9% 4% 7% 14%
I don’t know         10%       8%     12%     10%  

“Millennials” defined as age 25 – 34 // “Gen X” defined as age
35 – 54 // “Baby Boomers” defined as age 55+

 

About E*TRADE Financial and Important Notices

E*TRADE Financial and its subsidiaries provide financial services,
including online brokerage and banking products and services to retail
customers. Specific business segments include Trading and Investing and
Balance Sheet Management. Securities products and services, including
stocks, bonds, mutual funds, options, and ETFs are offered by E*TRADE
Securities LLC (Member FINRA/SIPC).
Managed Account Solutions are offered through E*TRADE Capital
Management, LLC, an investment adviser registered with the Securities
and Exchange Commission. Bank products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries
and affiliates. More information is available at www.etrade.com.

The information provided herein is for general informational purposes
only and should not be considered investment advice. Past performance
does not guarantee future results. ETFC-G

E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks or
registered trademarks of E*TRADE Financial Corporation.

© 2016 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and ResearchNow are separate companies
that are not affiliated. E*TRADE Financial Corporation engages
ResearchNow to program, field, and tabulate the study.

About ResearchNow

ResearchNow, a leading digital data collection provider, powers market
research insights. They enable companies to listen to and interact with
the world’s consumers and business professionals through online panels,
as well as mobile, digital, and social media technologies. Their team
operates in over 20 offices globally and is recognized as the market
research industry’s leader in client satisfaction. They foster a
socially-responsible culture by empowering their employees to give back.
To find out more or begin a conversation, visit www.researchnow.com.

Contacts

E*TRADE Media Relations
Thayer
Fox, 646-521-4418
thayer.fox@etrade.com
or
E*TRADE
Investor Relations

Brett Goodman, 646-521-4406
brett.goodman@etrade.com